GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9975-1.0050

Today’s expected range for the Canadian Dollar against the Euro is 1.2270-1.2370

Today’s expected range for the Canadian Dollar against Sterling is 1.5670-1.5770

The US Dollar is marginally stronger this morning as the Euro has rallied a little bit on the great expectation that the European Central bank will announce concrete stimulus measures on Thursday, basically I think Euro trading will stay on the sidelines until then. If we see a strong program out of the ECB equities should rally and the Euro should jump at the expense of the greenback but I am not completely confident in EU leadership that they will come across with what is necessary to help Spain and Italy.

Sterling is lower this morning as Moody’s cut the forecast for UK economic growth and a consumer confidence report show disappointing results. The recession in the UK continues to weigh on the Pound and it should continue to trade with a weak bias for the foreseeable future, I don’t think the economic benefit that is the Olympics will have a dramatic effect on the UK economy and pull it out of recession.

The Canadian Dollar had a bit of strength last night but is virtually unchanged from the Toronto close yesterday. USD.CAD trading will most likely remain in tight ranges for the next couple of North American sessions, Canadian Dollar traders will await the US Federal Reserve announcement tomorrow to see if they are going to add more stimulus and then of course they will await the ECB announcement on Thursday before becoming active again. With the employment reports on Friday we could be in for a very volatile start to the dog days of summer.

Up today we have a slew of economic activity out of the US today (I have the complete list on the blog) which could see some enhanced volatility around their release, again USD.CAD could not break below the 1.0000 level last night so I would still encourage US Dollar buyers to try and lock in some of their forward requirements at these levels, we have seen just how violently USD.CAD can jump higher and if the ECB disappoints on Thursday I would not be surprised if USD.CAD was back up at 1.0200 very quickly.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday July 31, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.001			1.0038
CAD/USD		0.999			0.9962
EUR/USD		1.2283			1.2256
EUR/CAD		1.2296			1.2306
STG/CAD		1.57			1.5763
AUD/CAD		1.0534			1.0533
CAD/JPY		78.08			77.89
CAD/CHF		0.9763			0.9751
CAD/HKD		7.7393			7.72
CAD/CNY		6.3515			6.3497
CAD/MXN		13.2285			13.1968
Commodities
Gold		$1,624			$1,617
OIL		$90.01			$90.10
Option Volatility
Canada
O/N		11.62%			11.67%
1 Week		8.69%			8.45%
1 Month		8.02%			7.90%

Today's Economic Calendar

USA
Personal Income and Expenditure for June (08:30)
Shiller Home Price Index for May (09:10)
Chicago PMI for July (09:45)
Consumer Confidence for July (10:00)

CANADA
Real GDP for may (08:30)

GFX Morning Commentary July 30th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0000-1.0100

Today's expected range for the Canadian Dollar against the Euro is 1.2270-1.2370

Today's expected range for the Canadian Dollar against Sterling is 1.5740-1.5840

The US Dollar is marginally stronger in quiet overnight trading markets, this morning the Spanish Government reported that their economy shrank by 0.4% last quarter (after a 0.3% drop in the previous quarter) and unemployment reached 24.6% (I imagine youth unemployment is much higher than 25%). On Thursday the ECB announces on interest rates and given the comments last week from Governor Draghi about protecting the Euro he is now under increased pressure to produce results at this meeting, if he does nothing then the Euro will get crushed.

In addition to the ECB we also get the US Federal Reserve announcing interest rate policy and with the expectation by investors that the Fed will add stimulus to the economy we may see some enhanced volatility this week.

The Canadian dollar had a quiet night trading against the Greenback, while it is holding onto its recent gains it does not seem able to break much lower and make a good run at parity. While I still think it can get back to parity  (especially is the news out of Europe remains positive) it may take strong action from  ECB and Federal Reserve announcements to get there. If these announcements disappoint then USD.CAD will be back up at 1.0200 very quickly and possibly higher.

Have a great week

Mike

GFX Morning Currency Rates
Monday July 30th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0038			1.008
CAD/USD		0.9962			0.992
EUR/USD		1.225			1.2273
EUR/CAD		1.2306			1.2373
STG/CAD		1.5763			1.5844
AUD/CAD		1.0533			1.0512
CAD/JPY		77.94			77.46
CAD/CHF		0.9751			0.9698
CAD/HKD		7.72			7.6873
CAD/CNY		6.3447			6.3269
CAD/MXN					13.3265
Commodities
Gold		$1,617			$1,622
OIL		$90.10			$89.48
Option Volatility
Canada
O/N		11.67%			7.94%
1 Week		8.45%			8.76%
1 Month		7.90%			8.09%

No North American Economic Releases Today

GFX Morning FX Commentary July 27th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0050-1.0150

Today's expected range for the Canadian Dollar against the Euro is 1.2375-1.2475

Today's expected range for the Canadian Dollar against Sterling is 1.5810-1.5910

The US Dollar is marginally stronger this morning as the Euro has given back a little strength from yesterday's big move. This morning the reaction to ECB's Draghi comments on the Euro were met by interesting comments from the German Central Bank today. Most global investors yesterday took Draghi's comments to mean that the ECB would buy Spanish and Italian bonds if need be, this morning the Bundesbank came out and said that was not such a good idea, another great example of what I mean when I say the leadership in Europe is very lacking.

The Canadian Dollar had a quiet night with USD.CAD moving back up towards the 1.0100 level. Every time over the past few weeks where we see USD.CAD break below 1.0100,  the move quickly fizzles out and then moves higher. I think we will need a good break of 1.0050 before the currency pair has any chance at getting back to parity. The Loonie continues to hold onto its strength against the Euro and Sterling but is not breaking any new ground as it awaits the next big direction.

Currency markets could have some added volatility today as we get our first look at the 2nd quarter GDP numbers out of the States, we are expecting an annualized growth rate of  1.4% for the quarter.  Any number less than this should create the impression that the economy needs more stimulus from the Federal Reserve, which will push stock markets higher and will move USD.CAD lower.

Have a great weekend

Mike

GFX Morning Currency Rates
Friday July 27, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.008			1.01
CAD/USD		0.992			0.99
EUR/USD		1.2273			1.2224
EUR/CAD		1.2373			1.234
STG/CAD		1.5844			1.5728
AUD/CAD		1.0512			1.0489
CAD/JPY		77.46			77.45
CAD/CHF		0.9698			0.9722
CAD/HKD		7.6873			7.6812
CAD/CNY		6.3269			6.3204
CAD/MXN		13.3265			13.35
Commodities
Gold		$1,622			$1,615
OIL		$89.48			$89.75
Option Volatility
Canada
O/N		7.94%			11.61%
1 Week		8.76%			8.68%
1 Month		8.09%			7.27%

Today's Economic Calendar

USA
GDP for the 2nd Quarter (08:30)
Final Consumer Sentiment for July (9:55)

CANADA
None

GFX Morning FX Commentary, July 26th 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0050-1.0150

Today's expected range for the Canadian Dollar against the Euro is 1.2340-1.2440

Today's expected range for the Canadian Dollar against Sterling is 1.5760-1.5860

The US Dollar is in full retreat this morning as the rhetoric is really flying in Europe this morning. In a speech this morning, European Central Bank Governor Mario Draghi stated that the ECB “will do whatever it takes to preserve the currency”, these comments came after Spanish officials were calling for the ECB to do more and halt their growing interest rate costs. On the this statement the Euro jumped above the 1.2200 level against the Greenback in very volatile conditions, stock markets which had been weak all morning jumped higher as well. Once again we see nothing but words from EU officials as the European situation continues to decline, I think I will favour selling Euro at these levels, until I see these leaders get of their high horse and actually take concrete action then the Euro should continue to be vulnerable to decline.

With the overnight weakness in the US Dollar the Canadian dollar had its best night in months with USD.CAD falling back to near 1.0100, this was one of the most volatile overnight sessions we have seen this year. With nothing but secondary US data due out today and with North American stock markets going to open to the top side we should see  USD.CAD continue to move a bit lower, I would however caution US Dollar buyers who want to wait, every time we get below 1.0100 in recent weeks the US Dollar has rallied and it quickly becomes more expensive. If it was me and I needed some USD in the next few weeks I would be looking at current levels to buy some USD.

Have a great day

Mike

GFX Morning Currency Rates
Thursday July 26, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.01			1.0128
CAD/USD		0.99			0.9873
EUR/USD		1.2224			1.2144
EUR/CAD		1.234			1.236
STG/CAD		1.5728			1.5785
AUD/CAD		1.0489			1.0469
CAD/JPY		77.45			76.82
CAD/CHF		0.9722			0.9712
CAD/HKD		7.6812			7.6194
CAD/CNY		6.3204			6.2757
CAD/MXN		13.35
Commodities
Gold		$1,615			$1,591
OIL		$89.75			$88.52
Option Volatility
Canada
O/N		11.61%			12.55%
1 Week		8.68%			9.44%
1 Month		7.27%			8.90%

Today's Economic Calendar

USA
Durable Goods Orders for June (08:30)
Pending Home Sales for June (10:00)

CANADA
None

GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0140-1.0240

Today's expected range for the Canadian Dollar against the Euro is 1.2350-1.2450

Today's expected range for the Canadian Dollar against Sterling is 1.5760-1.5860

The US Dollar is weaker this morning as the Euro has received a push higher from comments made by one of the ECB members that the EU rescue fund could be given a brand new banking license which would create the advantage of allowing the European Central Bank to lend directly to the fund, presently their charter cannot do that. This to me is yet another example of the EU leadership reaching at straws to try and solve this problem, the only solution in my mind  is for the EU to issue joint bonds with each nation guaranteeing each other debt but with the political division in Europe this will never happen so the crisis will continue. The rise in the Euro was pared backed by the German Business Confidence report that showed confidence in the economy continues to slip which of course will only lead to less investment.

Readers may recall that a few months back I reported that the Swiss National Bank (Swiss Central Bank) announced that they were setting a floor for the Swiss Franc (CHF) against the Euro to prevent their currency from getting stronger and hurting their export market. The floor for EURO.CHF was set at 1.2000 and with the weakness in the Euro over the last month the SNB has been in the currency market buying Euro's to defend this level, it is estimated that to date they have bought some 20 Billion Euro helping to prop up the Euro. I could only imagine where the Euro would have gone if they had backed off this commitment which they may be forced to do at some point, no single institution is bigger than the market.

With the weakness in the US Dollar overnight the Loonie has pulled back some strength and USD.CAD is back below the 1.0200 level but still trading in narrow ranges. The only economic date of any significance is the US New Home Sales report for June so we may get some volatility if the number still points to a recovery in the US housing markets but barring any surprises USD.CAD should stay range bound today.

Have a great day

Mike

GFX Morning Currency Rates
Wednesday July 25th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0178			1.0192
CAD/USD		0.9825			0.9811
EUR/USD		1.2144			1.2083
EUR/CAD		1.2360			1.2321
STG/CAD		1.5785			1.5800
AUD/CAD		1.0469			1.0468
CAD/JPY		76.82			76.69
CAD/CHF		0.9712			0.9743
CAD/HKD		7.6194			7.6080
CAD/CNY		6.2757			6.7641
CAD/MXN		13.3734			13.4125
Commodities
Gold		$88.57			$88.54
OIL		$1,591.00			$1,572.90
Option Volatility
Canada
O/N		12.55%			11.64%
1 Week		9.43%			8.47%
1 Month		8.90%			8.26%

Today's Economic Calendar

USA
New Home Sales for JUne (10:00)

CANADA
None