GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0160-1.0260

Today's expected range for the Canadian Dollar against the Euro is 1.2300-1.2400

Today's expected range for the Canadian Dollar against Sterling is 1.5780-1.5900

The US Dollar is marginally stronger overnight as the news released late in the day yesterday that Moody's was putting Germany (along with Holland and Luxembourg) on a rating watch with a bias towards cutting their AAA rating. Of course German officials came out this morning and defended their policies but basically Moody's said the prolonged Euro-Zone crisis is starting to effect even the strongest countries in Europe. The Euro did not drop a lot on this report but it is still trading with a weak bias at the moment and will continue to do so today.

Asian Equity markets were higher overnight as China reported stronger than expected manufacturing data, this report should help stocks here in North America open to the positive side, whether they can hold onto that strength remains to be seen.

The Canadian Dollar had a very quiet night against the US Dollar, it did manage to pull back some strength against the Greenback yesterday afternoon. Basically the Loonie is completely following any movement in the equity markets, if stocks are higher USD.CAD will fall, if stocks are lower USD.CAD will rise.

Up today we get the Canadian Retail Sales report for May and we are expecting an increase of 0.5%, if the number is much different than expectation I think it will have an impact on the Loonie but if it comes in as expected then USD.CAD will continue to get its direction from the equity markets. With New York and Toronto expected to open slightly higher we should see USD.CAD struggle to stay above 1.0200 but overall I am not expecting much of a trading range. US Dollar buyers should look to put some forward contract on any move back below 1.0150.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday July 24th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0192			1.0160
CAD/USD		0.9811			0.9842
EUR/USD		1.2083			1.2123
EUR/CAD		1.2321			1.2319
STG/CAD		1.5800			1.5786
AUD/CAD		1.0468			1.0454
CAD/JPY		76.6900			76.9100
CAD/CHF		0.9743			0.9745
CAD/HKD		7.6080			7.6324
CAD/CNY		6.7641			6.2845
CAD/MXN		13.4125
Commodities
Gold		$88.54			$89.06
OIL		$1,572.90			$1,570.85
Option Volatility
Canada
O/N		11.64%			11.46%
1 Week		8.47%			8.36%
1 Month		8.26%			8.23%

Today's Economic Calendar

CANADA
Retail Sales for May (08:30)

USA
Richmond Fed Index for July (10:00)
FHFA House Price Index for May (10:00)