GFX Morning FX Commentary August 7th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9940-1.0040

Today's expected range for the Canadian Dollar against the Euro is 1.2380-1.2500

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

The US Dollar is weaker this morning as we come back from our holiday weekend. In Europe the German Finance Ministry has come out and said they support Mario Draghi's plan for the ECB to buy Spanish and Italian Bonds to help them lower their borrowing costs. Basically this is the same old answer, have the ECB lend money to debtor nations so they can continue to run deficits and prolong the crisis. This short-term fix has given the Euro some brief strength but in the long run is not a solution. EURO.USD is now trading at 1.2430 which is the highest level it has achieved in weeks.

With the US Dollar trading weaker USD.CAD looks like it wants to make a clean break of par but it may yet take a big push to get through, USD.CAD trading has been lackluster at the very least.

Up today we don’t get a whole lot of economic data, we get Canadian Building permits and the Ivy Purchasing Managers index so with the TSX playing catch up today we should continue to see USD.CAD under pressure to move lower. For short-term US Dollar sellers you now want to consider leaving your orders between par and 1.0050, pullback for the USD may be limited now over the next few sessions.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday August 07, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.998			1.0015
CAD/USD		1.002			0.9985
EUR/USD		1.2412			1.2286
EUR/CAD		1.2388			1.2305
STG/CAD		1.5617			1.5619
AUD/CAD		1.0562			1.0545
CAD/JPY		78.48			78.14
CAD/CHF		0.9693			0.9754
CAD/HKD		7.7613			7.7408
CAD/CNY		6.3772			6.3622
CAD/MXN		13.1787
Commodities
Gold		$1,618			$1,596
OIL		$92.44			$89.30
Option Volatility
Canada
O/N		11.45%			9.55%
1 Week		7.96%			9.00%
1 Month		7.82%			8.09%