GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9900-1.0000

Today's expected range for the Canadian Dollar against the Euro is 1.2410-1.2500   

Today's expected range for the Canadian Dollar against Sterling is 1.5720-1.5820

The US Dollar is marginally stronger this morning as fresh comments from US Federal Reserve members have dampened expectations about the Fed increasing stimulus to the US economy and a meeting between Greece, France and Germany tomorrow are not expected to buy Greece any more time to pay back their debt.

Since I was away the Euro has been on a big run as investors expect that the ECB will buy the bonds of indebted nations and enable each of them more time to get their economies in order, but now the Euro has run into some headwinds as Greece is going to ask for more time to pay as they cannot meet their payment schedule, a Greek default is becoming more of a certainty which cannot be good for the Euro.

In America there is growing pessimism that the US Federal Reserve will not do anything in September which caused all equity markets overnight to drop and gave the US dollar a bit of a boost. The annual central bank symposium next week in Jackson Hole, Wyoming, where Fed Chairman Bernanke gives the keynote address will take on added significance,  September will be the last chance I believe for the Fed to add stimulus before the election in November.

The Canadian Dollar had a good run the past week and I hope US Dollar buyers were able to put some forward contracts on as these levels may be tough to hold. Overnight with the drop in equities and a jump in the Greenback the Loonie gave back some strength and is USD.CAD is now 100 points higher than its lowest level of last week. With equity markets lower today I would expect that USD.CAD should continue to move a little bit higher this morning.

On a personal note Mrs. Smith and I had a great few days in Quebec City for the purpose of heading to the National Park at Grosse-Isle. If you have never been to Grosse-Isle I would definitely recommend it, it would be the equivalent to the States Ellis Island and it documents our immigration history from 1830's to 1937, it is a great day out.

 

Have a great weekend.

Mike

GFX Morning Currency Rates
Friday August 24, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9936			0.9906
CAD/USD		1.0064			1.0096
EUR/USD		1.2521			1.255
EUR/CAD		1.2439			1.2433
STG/CAD		1.5734			1.5725
AUD/CAD		1.0325			1.0375
CAD/JPY		79.01			79.31
CAD/CHF		0.9648			0.9654
CAD/HKD		7.8015			7.8227
CAD/CNY		6.3934			6.4115
CAD/MXN		13.3229			13.2607
Commodities
Gold		$1,668			$1,665
OIL		$95.85			$97.93
Option Volatility
Canada
O/N		4.00%			7.50%
1 Week		6.40%			6.50%
1 Month		7.00%			7.00%