GFX Morning Commentary March 1st, 2012

Good Morning,

Todays suggested range for the Canadian dollar against the US Dollar is .9825 - .9925.

Todays suggested range for the Canadian dollar against the Euro is 1.3100-1.3200

Todays suggested range for the Canadian dollar against Sterling is 1.5700-1.5800

The US Dollar is mixed this morning as it is weaker against the high yielding currencies (currencies of countries that have higher interest rates than most others) and stronger against the Euro. The Euro is marginally weaker this morning as an EU report is calling for Ireland to increase spending cuts so it hits its deficit targets, I think I might be having a case of deja-vu as write this where have I seen this situation play out before…hmmmm, sounds very familiar.

The Dollar is losing ground to currencies like the Norwegian Kroner, Aussie and New Zealand Dollar's and of course the Canadian Dollar as it looks like global investors are moving out of Europe and into stable economies where they can get a little more yield on their investments with little risk, if this trend continues over the short term it should continue to push USD.CAD lower

Yesterday saw US Fed Chairman Ben Bernanke deliver an upbeat speech on the US economy where he said that the rise in employment has been surprising and that the recent rise in gasoline prices while temporary will reduce consumer spending and weaken the recovery, he all but ruled out any further Quantative easing in the next little while. On this report the equity markets gave up some gains and the Greenback recovered against the Euro and was able to push stronger overnight.

The Loonie traded in a narrow range overnight but it did hang onto yesterday's strength and it looks to me that it will start to trade back and forth around the .9900 level for the next little while, previously it traded for a number of weeks around par so I will not be surprised if it takes on the same pattern but around the .9900 level instead of par.

For today we start a new month of economic data with the release of lots of secondary data both in Canada and the USA  and then the market will set up for the release of Canada’s GDP report for the 4th quarter tomorrow. For today with equity markets pointing a bit higher to start the month look for USD.CAD to test a bit lower but I think we will see it settle into a new range and trade back and forth around .9900.

Have a great day and a great month, hard to believe it is already March

Mike

GFX FOREIGN EXCHANGE MORNING UPDATE

Thursday, March-01-12

Market Indicators                   * For current market prices please contact our currency advisors or visit our
                                                  online site at www.gfxpartners.ca *

Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.986			0.99
CAD/USD		1.0142			1.01
EUR/USD		1.3324			1.3446
EUR/CAD		1.3139			1.3305
STG/CAD		1.5722			1.5765
AUD/CAD		1.0621			1.071
CAD/JPY		82.15			81.37
CAD/CHF		0.917			0.9067
CAD/HKD		7.8637			7.847
CAD/CNY		6.3862			6.3539
Commodities
Gold		$1,711			$1,788
OIL		$107.20			$107.05
Option Volatility
Canada
O/N		12.00%			10.67%
1 Week		9.30%			8.26%
1 Month		8.85%			8.46%