GFX Morning FX Commentary, July 20th

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0040-1.0140

Today's expected range for the Canadian Dollar against the Euro is 1.2320-1.2420   

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 lack of economic reports today have led the currency markets to trade in narrow ranges. The Euro continues to trade with a weak tone after yesterday’s poor Spanish Bank auctions, I don't think much will happen in the coming months to change this view, the Euro should continue to trade weaker and we will sell into it whenever it shows short-term strength.

The Canadian Dollar  is right where we left it last night against as it too traded in a very narrow range. If we continue to see equity markets trade higher then I think we will see USD.CAD slowly move towards par, the big risk of course is that we see something negative come to the market and USD.CAD rises violently, to that end if I needed to buy some USD in coming months I would be buying some forward contracts at these levels, they are the best we have seen in weeks.

Up today we get the release of the Canadian CPI report for June, with inflation being fairly benign for some time now I doubt this number will have much impact on the market, if it does surprise to the top side then I would expect the Loonie to rally as continued inflation may force the Bank of Canada to raise interest rates earlier than previously thought.

Have a great weekend

Mike

GFX Morning Currency Rates
Friday July 20th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0085			1.0071
CAD/USD		0.9915
EUR/USD		1.2231			1.2300
EUR/CAD		1.2336			1.2389
STG/CAD		1.5831			1.5797
AUD/CAD		1.0495			1.0507
CAD/JPY		77.8300			77.9800
CAD/CHF		0.9730			0.9690
CAD/HKD		7.6496			7.6496
CAD/CNY		6.2874			6.2865
CAD/MXN		13.1216			13.0117
Commodities
Gold		$90.49			$1,584.63
OIL		$1,581.80			$90.99
Option Volatility
Canada
O/N		7.40%			10.40%
1 Week		7.76%			7.82%
1 Month		7.47%			7.64%

Today's Economic Calendar
CANADA
CPI for June (08:30)