GFX Morning FX Commentary, June 18th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0200-1.0300

Today’s expected range for the Canadian Dollar against the Euro is 1.2900-1.3025

Today’s expected range for the Canadian Dollar against Sterling is 1.6000-1.6125

The US Dollar is virtually unchanged as I write this morning, initially the US Dollar was weaker as overseas equity markets all jumped higher on the news that the pro-austerity and pro-EU New Democracy party has come out ahead in the Greek election, on this report EURO.USD jumped above the 1.2700 level for the first time in over a month. The euphoria quickly died away as the results of the Spanish bond auction were released and it showed that Spain was forced to pay above the 7% mark for the first time ever, and that the 100 billion Euro bailout of the Spansih Banks may not be enough, clearly the Euro-zone lurches from crisis to crisis and does not seem to be able to solve this problem. It will now be up to the New Democracy party to try and form a coalition government and push through the austerity program, markets will watch closely to see if they have any success this time around.

Up today we will get the first reports from the G-20 meeting in Los Cabos, Mexico where the Euro crisis should dominate the agenda. We may see some enhanced volatility if they announce any mechanisms to combat the Euro crisis, my expectation is that they will not come up with any concrete solutions as there does seem to be a divide on whether North American countries should help Europe out of this situation.

The Canadian Dollar traded stronger during the night but once the results of the Spanish bond auction were released then USD.CAD moved back higher, once again we see evidence of that the Loonie is reacting to developments outside our borders. Without any big announcements from Los Cabos or any new reports from Europe, USD.CAD should remain stuck in this 1.0200-1.0300 trading range.


Have a great week
Mike

GFX Morning Currency Rates
Monday June 18, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0247			1.023
CAD/USD		0.9759			0.9775
EUR/USD		1.2625			1.2614
EUR/CAD		1.2939			1.2906
STG/CAD		1.6031			1.5902
AUD/CAD		1.0336			1.0268
CAD/JPY		77.13			76.91
CAD/CHF		0.9278			0.9299
CAD/HKD		7.5687			7.5786
CAD/CNY		6.2051			6.2184
CAD/MXN		13.5856			13.5708
Commodities
Gold		$1,621			$1,625
OIL		$83.54			$84.43
Option Volatility
Canada
O/N		15.98%			13.50%
1 Week		11.07%			12.54%
1 Month		10.07%			10.49%