GFX Morning FX Commentary, June 26th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0225-1.0325

Today's expected range for the Canadian Dollar against the Euro is 1.2800-1.2900

Today's expected range for the Canadian Dollar against Sterling is 1.6010-1.6125

The US Dollar is marginally stronger this morning as EURO.USD has fallen once again on fears that an EU summit this week will not come up with a solution to the current financial crisis. I get a sense from everything that I am reading that there is a growing split in the EU over whether they should share in a common debt or continue as they are with each country standing alone, Germany is diametrically opposed to issuing common debt and is unlikely to change its position so this crisis will continue for some time. Yesterday saw the island nation of Cyprus ask for a bailout from the EU and IMF, they cited the exposure to Greek banks as the leading cause for the request. You have heard me say this before but I do not believe that the current EU leadership has the will nor the skill set to solve this crisis, there is just too much division among the leaders.

This morning NATO it the “strongest possible words” condemned the shooting down of NATO member Turkey fighter jet by Syria, if this incident escalates into a broader conflict then NATO will be drawn into a fight with Syria and Russia would not be far behind. Keep an eye on this situation, if it grows then financial markets will get hit hard. There was no mention by NATO on the number of civilians killed by the Assad regime this week, just about the fighter jet!!

The Canadian dollar continues in the 1.0200 to 1.0300 trading range and surprisingly last night the Loonie pulled back some small strength even as the USD got stronger. The commodity currencies all gained a little on the reports that Bank of England Governor King favour’s more quantative easing as opposed to another rate cut for the UK economy.

Up today we get the release of some secondary US data including the US Consumer Confidence report which is expected to show the confidence the US consumer has in the economy is slipping. We also get the Richmond manufacturing data where we are expecting a small uptick in manufacturing, either way I think they won’t have much of an impact on today’s trading range.

With North American equity markets expected to open higher this morning I would expect USD.CAD to move back towards the middle of our trading range, given current conditions I am not expecting any breakout for the Loonie over the short-term.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday June 26, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0254			1.029
CAD/USD		0.9752			0.9718
EUR/USD		1.2497			1.2478
EUR/CAD		1.2818			1.2841
STG/CAD		1.6039			1.5998
AUD/CAD		1.0307			1.0281
CAD/JPY		77.32			77.57
CAD/CHF		0.9363			0.9347
CAD/HKD		7.5583			7.5341
CAD/CNY		6.2018			6.1808
CAD/MXN		13.5247			13.5356
Commodities
Gold		$1,585			$1,568
OIL		$79.36			$79.01
Option Volatility
Canada
O/N		13.70%			11.74%
1 Week		9.86%			9.72%
1 Month		9.51%			9.40%

Today's Economic Calendar

USA

Consumer Confidence for June (10:00)

Richmond Fed Manufacturing Index for June (10:00)

CANADA

None