GFX Morning FX Commentary, August 31st, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9850-.9950

Today's expected range for the Canadian Dollar against the Euro is 1.2440-1.2550

Today's expected range for the Canadian Dollar against Sterling is 1.5660-1.5800

The US Dollar is weaker overnight as the currency markets position themselves for Fed Chairman Bernanke’s monetary policy speech this morning at 10:00 am from Jackson Hole. Overnight Asian and European equity markets all jumped higher and EURO.USD traded back above 1.2500, it is quite clear that investors (as am I) are expecting some signs in the speech that the Fed will introduce another round of Quantitative Easing in September.

The Canadian Dollar continues to trade close to the .9900 level but I expect it will get quite volatile as today's speech is released, a pro-stimulus speech should push equities higher and USD.CAD lower towards our low last week around .9850 and a wait and see style speech will push equities lower and USD.CAD higher towards parity.

Also today we get some more secondary US data which should not have much effect on the market, we also have the release of the Canadian GDP report for the 2nd Quarter and the June monthly numbers, for the 2^nd Quarter we are looking for a year over year number of 2.2% (1.6% for the actual number) so we are growing a little faster than the US economy. If this number disappoints the Loonie could see some enhanced volatility around the release.

Just a reminder that our office is closed Monday for the Labour Day Holiday but the Canadian Dollar will still be trading on the international currency markets. Make sure you place your orders before you go home today as we have seen in the past the Loonie can become quite violent in thin trading markets.

Have a great holiday weekend

Mike

GFX Morning Currency Rates
Friday August 30, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.991			0.9913
CAD/USD		1.009			1.0087
EUR/USD		1.2577			1.254
EUR/CAD		1.2466			1.2432
STG/CAD		1.567			1.5697
AUD/CAD		1.0237			1.0242
CAD/JPY		79.28			79.27
CAD/CHF		0.9631			0.9653
CAD/HKD		7.8063			7.8016
CAD/CNY		6.407			6.4017
CAD/MXN		13.4628			13.4767
Commodities
Gold		$1,661			$1,658
OIL		$95.20			$95.33
Option Volatility
Canada
O/N		4.50%			7.53%
1 Week		6.20%			6.18%
1 Month		6.45%			6.43%