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)