GFX Morning FX Commentary April 5th, 2012

Good Morning

Today's expected range for the Canadian Dollar against the US Dollar is .9940-1.0040

Today's expected range for the Canadian Dollar against the Euro is 1.3040-1.3150

Today's expected range for the Canadian Dollar against Sterling is 1.5800-1.5900

The US Dollar is higher this morning as concerns over the Euro debt crisis and ECB Governor Draghi's inflation comments yesterday continue to weigh on the Euro. This morning EURO.USD fell to trade at 1.3060 a 3 week low on concerns that the interest rates that Italy and Spain have to pay to borrow money from the markets is once again climbing and putting pressure on their budget deficits. Yesterday also saw Draghi continually talk during his press conference about future inflation which spooked investors into thinking the ECB may be forced to raise interest rates sooner than later, still as we can see a very nervous market in Europe. France is going to the bond markets today to raise funds so a poor auction there could also put pressure on the Euro.

This morning the Bank of England kept interest rates at 0.5% and did not increase their support for the economy,  overall Sterling should continue to trade with a weak bias for the foreseeable future as that economy is still very weak. The BOE will release their minutes of this meeting in a couple of weeks’ time.

The Canadian Dollar continues to weaken off against the US Dollar but pulled back some strength against the Euro and Sterling. Up today we get the release of the Canadian employment report where we are expecting 10K new jobs to have been created and the unemployment rate to remain at 7.4%. Normally this report was always released at 7:00 am but today is the first time it will be released at 08:30, I am not sure why the change from Stats Canada, I guess it is to put the economic releases more in line with what the US does.

For today barring any surprises from the Employment report this morning USD.CAD should move higher as the equity markets look like the want to go lower.

Just a reminder that our office will be closed tomorrow for the Good Friday,  I will be watching the markets from home as tomorrow could be a very busy day, the US is open with the release their Employment report in the morning.

Have a great long weekend

Mike

GFX Morning Currency Rates
Thursday April 5th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9981			0.9935
CAD/USD					1.0065
EUR/USD		1.3072			1.3167
EUR/CAD		1.3072			1.3084
STG/CAD		1.58			1.5772
AUD/CAD		1.0254			1.0201
CAD/JPY		82.05			82.78
CAD/CHF		0.9207			0.9195
CAD/HKD		7.7773			7.8143
CAD/CNY		6.3143			6.3355
CAD/MXN		12.8565			12.9132
Commodities
Gold		$1,623			$1,633
OIL		$1.02			$103.36
Option Volatility
Canada
O/N		10.86%			10.18%
1 Week		8.40%			7.83%
1 Month		8.62%			8.25%