GFX Morning FX Commentary August 3rd, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9980-1.0080

Today's expected range for the Canadian Dollar against the Euro is 1.2280-1.2380

Today's expected range for the Canadian Dollar against Sterling is 1.5600-1.5700

The US Dollar is weaker this morning after trading stronger during the day yesterday, as I expected the ECB did not come out with any concrete action and disappointed the Financial markets. EURO.USD which had been trading higher before the announcement immediately fell by almost 200 points and traded weaker throughout the day. Overnight the Euro has recovered somewhat as currency traders focus moves to North America where we get the release of the US Employment report this morning (08:30). Most investors are expecting a disappointing report and betting that a bad report will finally force the hand of the Federal Reserve where they will add stimulus to the US economy at their September meeting. Both New York and Toronto equity markets are pointing higher on their opening which is pushing the US Dollar lower, it is funny to consider that a bad employment report will be good for equity markets but that is what we are seeing these days.

The Canadian Dollar spent yesterday trading weaker after the ECB number as we thought it would but it did not weaken off as much as I thought, it did not quite make the 1.0100 level. Overnight with the weaker US Dollar the Loonie recovered and looks once again like it wants to trade at par to the Greenback, a poor US Jobs report should give it enough of a push that USD.CAD moves lower as the US Dollar will decline across the board on a poor jobs report. We are actually looking for 100k new jobs to have been created last month but the unemployment rate to remain at 8.2%

With this being a holiday weekend in Ontario our office will be closed on Monday, please make sure you get your orders in early today as Canadian Dollar trading still occurs on Monday and we could have enhanced volatility because a lot of currency traders will be away from their desks.

Have a great weekend

Mike

GFX Morning Currency Rates
Friday August 03, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0015			1.0028
CAD/USD		0.9998			0.9972
EUR/USD		1.2286			1.2267
EUR/CAD		1.2305			1.2307
STG/CAD		1.5614			1.5594
AUD/CAD		1.0545			1.054
CAD/JPY		78.14			77.93
CAD/CHF		0.9754			0.9757
CAD/HKD		7.7408			7.7252
CAD/CNY		6.3622			6.3477
CAD/MXN					13.3446
Commodities
Gold		$88.30			$1,604
OIL		$1,596.00			$89.24
Option Volatility
Canada
O/N		9.55%			13.00%
1 Week		9.00%			9.25%
1 Month		8.08%			8.00%

Today's Economic Calendar

USA
Employment Report for July (08:30)
ISM non-Manufacturing for July (10:00)