GFX Morning FX Commentary October 31st, 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 1.2940-1.3040

Today’s expected range for the Canadian Dollar against Sterling is 1.6040-1.6140

The US Dollar is weaker this morning as the Euro has jumped back above the 1.3000 level, this morning it was optimism that Portugal is going to pass their 2013 austerity budget and EU ministers have a conference call scheduled to discuss the terms of the Greek bailout. Greece has been asking the EU for more time to pay back the loans so hopefully an accommodation can be reached.

The NYSE will return to operation this morning as it has to play catch up from the last two days, I am not sure how many people will make it back to work as most buses and all subways are still closed and will be for some time. Right now the opening is pointing to a jump of 50 points, a positive day should push the US Dollar lower.

The Canadian Dollar had the rally that we were looking for and USD.CAD is now firmly back below the 1.000 level, with the jump yesterday in the value of the Aussie and Kiwi dollars it made sense that the Loonie should  gain as well, it just took a day longer to happen.

Canadian Dollar trading will be dominated by the Canadian GDP report for August were we are expecting an increase in economic activity of 0.2% which equates to a 1.7% year over year growth rate, that is slight down from the July number. We also get some secondary US economic data including the ADP employment report so with the NYSE resuming operations we may see some enhanced volatility today.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9967			1.0003
CAD/USD		1.0033			0.9997
EUR/USD		1.3005			1.2952
EUR/CAD		1.2964			1.2957
STG/CAD		1.6062			1.6065
AUD/CAD		1.0334			1.035
CAD/JPY		79.83			79.11
CAD/CHF		0.9314			0.9322
CAD/HKD		7.753			7.7255
CAD/CNY		6.2574			6.241
CAD/MXN		13.0826			13.0726
Commodities
Gold		$1,719			$1,711
OIL		$86.32			$85.54
Option Volatility
Canada
O/N		9.27%			9.58%
1 Week		7.19%			7.23%
1 Month		6.65%			7.00%

 

GFX Morning Commentary October 30th, 2012

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 1.2925-1.3000

Today’s expected range for the Canadian Dollar against Sterling is 1.6040-1.6120

The US Dollar is marginally stronger this morning as the big news overnight was the announcement by the Bank of Japan that they will make another round of asset purchases to increase their quantative program (11 trillion Yen worth of assets). The Japanese export market is being hurt by a very strong yen so this program is expected to boost the economy and weaken the Yen but last night it had the opposite effect as investors felt the amount was too small to make a material difference to the economy. In a Bloomberg report this morning the head of Nissan motors said that if the Yen does not weaken back to 100 against the USD then his company would have to look at leaving Japan, if one company is thinking this then you know that many more are as well. It is probably an idle threat but the problem for the Japanese economy is huge and the Government is having a tough time at the  moment.

The Canadian Dollar is unchanged from yesterday where we had one of the quietest trading days in a long time, the Loonie more than any other currency is being affect by the decreased trading activity caused by Hurricane Sandy. Last night saw both the Aussie and Kiwi Dollars rise by 0.5% and the Canadian Dollar did nothing which is unusual, clearly the Loonie is lagging behind and we may see it play catch up today with USD.CAD moving a bit lower.

Today’s trading will of course be again dominated by Sandy, there are reports that the NYSE is under 3 feet of water so it may be days before trading gets back to normal, I am hoping that they  have a disaster recovery site that they can use in the short-term while repairs are made but I am not sure. All the other exchanges are electronic so they should have backup sites that they can roll out.

We do have some secondary US and Canadian data due out today so we may get some enhanced activity around these releases but for the most part today I would expect a subdued trading day with possibly the Loonie playing a little catch up to other commodity currencies and USD.CAD moving slightly lower.

I am going to try an new email service tomorrow, it is called GetResponse and you will receive an email asking if you want to receive the commentary, if you do want to get it you will need to reply to that email. Too many emails are not getting through to people that what to receive them on this present site. If you do not get the commentary tomorrow please let me know at msmith@gfspartners.ca and I will investigate.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0003			0.9991
CAD/USD		0.9997			1.0009
EUR/USD		1.2952			1.2984
EUR/CAD		1.2957			1.2894
STG/CAD		1.6065			1.6045
AUD/CAD		1.035			1.0323
CAD/JPY		79.11			79.34
CAD/CHF		0.9322			0.9372
CAD/HKD		7.7255			7.7349
CAD/CNY		6.241			6.246
CAD/MXN		13.0726			13.0815
Commodities
Gold		$1,711			$1,712
OIL		$85.54			$85.87
Option Volatility
Canada
O/N		9.58%			10.00%
1 Week		7.23%			7.49%
1 Month		7.00%			6.95%

 

 

GFX Morning FX Commentary October 29th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9950-1.0050

Today’s expected range for the Canadian Dollar against the Euro is 1.2870-1.2970

Today’s expected range for the Canadian Dollar against Sterling is 1.6020-1.6120

The US Dollar is stronger this morning as negative news continues to come out of Europe and more evidence that the current crisis is weighing on the overall health of the Euro economy. Amid reports of Spanish Retail Sales dropping 11% year over year Italian Prime Minister Monti met with Spain’s Prime Minister Rajoy this morning to try and convince him to apply for a full bailout, the Spanish economy it appears to me is in a free fall and investors are going to keep punishing the Euro until Spain makes it application, the sooner they do it the better it will be for Europe.

The Canadian Dollar is weaker this morning on the back of the stronger US Dollar and now USD.CAD looks set to test above parity at some point. I am not quite sure what effect Hurricane Sandy is going to have on the markets today, with New York shut down most banks will move to their disaster recovery sites or have other international branches remain open to cover off the trading day, my guess is that with the NYSE closed FX trading will be light as equities have been the driver for the currency markets. Commodity markets should be unaffected as they are for the most part traded out of the CME in Chicago, I don’t think the storm will have much effect on the price of commodities as there won’t be any major gas or oil fields in the path of the storm. If any East Coast refining capacity is extensively damaged then you may see oil and gasoline futures jump.

Everything being equal I look for a reduced volume day and a test of USD .CAD to move above parity at some point.

Have a great week and make sure you have emergency supplies at home, with the amount of rain and wind we are expecting I am sure we will have power losses along the way.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9991			0.9969
CAD/USD		1.0009			1.0031
EUR/USD		1.2984			1.2893
EUR/CAD		1.2894			1.2854
STG/CAD		1.6045			1.6055
AUD/CAD		1.0323			1.0292
CAD/JPY		79.34			79.99
CAD/CHF		0.9372			0.9403
CAD/HKD		7.7349			7.7514
CAD/CNY		6.246			6.2656
CAD/MXN		13.0815			13.1383
Commodities
Gold		$1,712			$1,703
OIL		$85.87			$86.00
Option Volatility
Canada
O/N		10.00%			7.03%
1 Week		7.49%			7.70%
1 Month		6.95%			6.97%

 

GFX Morning FX Commentary October 26th,2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar .9930-1.0000

Today’s expected range for the Canadian Dollar against the Euro is 1.2825-1.2900

Today’s expected range for the Canadian Dollar against Sterling is 1.6030-1.6125

The US Dollar is stronger this morning as recent earnings reports from major US companies have spooked the equity markets and given strength to the US Dollar on the safe haven effect. Yesterday afternoon after the markets closed  it was Apple that missed their earnings target and as a result the Dow Jones is pointing down 100 points on the opening this morning. Also giving some strength to the Greenback and hurting the  Euro was a poor French household sentiment report and the Spanish unemployment report that showed one in four Spaniards are now unemployed, I fail to see how an economy as big as Spain’s can recover from this massive unemployment when it is forced to shut down spending to reign in a massive budget deficit. I am sure it is only a matter of time before Spain asks for the full bailout package from the Troika.

The Canadian Dollar is as you would expect trading weaker with USD.CAD poised to break above .9950 again this morning, once again the Loonie is just following the crowd and USD.CAD is trading on the back of global factors. Today’s trading will be dominated by the release of the US GDP report for 3^rd quarter which is expected to show an annualized growth rate of 1.8% up from the previous growth rate in the 2^nd quarter of 1.3%. Not a spectacular number but it will continue a long string of positive US economic reports that we have been seeing recently. A stronger than expected number should help the equities pair their losses and push USD.CAD lower and if the number is poorer than expected USD.CAD should jump higher on weaker equity markets.

Have a great weekend

Mike

GFX Morning Currency Rates Friday October 26, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9969			0.9904
CAD/USD		1.0031			1.0096
EUR/USD		1.2893			1.2995
EUR/CAD		1.2854			1.2873
STG/CAD		1.6055			1.5976
AUD/CAD		1.0292			1.0288
CAD/JPY		79.99			80.84
CAD/CHF		0.9403			0.9391
CAD/HKD		7.7514			7.8016
CAD/CNY		6.2656			6.2926
CAD/MXN		13.1383			13.0728
Commodities
Gold		$86			$1,715
OIL					$86.25
Option Volatility
Canada
O/N		7.03%			9.28%
1 Week		7.70%			7.04%
1 Month		6.97%			7.00%

 

GFX Morning FX Commentary October 25th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9875-.9950

Today’s expected range for the Canadian Dollar against the Euro is 1.2850-1.2950

Today’s expected range for the Canadian Dollar against Sterling is 1.5970-1.6050

The US Dollar is weaker this morning as developments in Europe continue to effect the currency markets. The Euro is stronger this morning on mixed reports that the EU troika (EU, ECB and IMF)  will give Greece an extension of two years to pay back their loans in exchange for a new austerity program, this report was announced by the Greek Prime Minister but denied by EU officials so I am not sure if it has yet been approved. The big mover overnight was Sterling which got a big boost from their GDP report which showed that they officially came out of their double dip recession on a 2^nd quarter growth rate of 1.0%, much better than expected and the fastest expansion in 5 years. I think this was the quarter that has the “Olympic effect” in it so we will see if the UK can sustain this growth rate for the rest of the year, GBP.USD got a good jump on this report reaching a high of 1.6130.

The Canadian Dollar is marginally weaker as it still moves between .9900 and .9950, it looks like USD.CAD is trailing other commodity currencies which seem to be strengthening ahead of the Loonie, I would have thought that USD.CAD would be below .9900 by now but the Loonie is struggling to get stronger at the moment, perhaps today will be the day. There were no surprises yesterday from the Federal Reserve announcement or the Bank of Canada Monetary Policy report, in the US the Fed stated the US economy still needs the stimulus program and that low interest rates will be around until 2015, in Canada Carney made a statement that higher interest rates in Canada are not imminent but further down the road.

Up today we have a full calendar of US economic data along with major corporate earnings releases, recently we have seen quite a few US based companies disappoint on their results which have spooked the equity markets, if this happens today and equities drop off then we may see USD.CAD rise in reaction to this drop and break above .9950, if the economic and the earnings reports are strong then that may give the push needed for USD.CAD to fall below .9900.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9904			0.9906
CAD/USD		1.0096			1.0095
EUR/USD		1.2995			1.2943
EUR/CAD		1.2873			1.2825
STG/CAD		1.5976			1.5864
AUD/CAD		1.0288			1.0229
CAD/JPY		80.84			80.5
CAD/CHF		0.9391			0.9431
CAD/HKD		7.8016			7.8012
CAD/CNY		6.2926			6.3006
CAD/MXN		13.0728			13.1412
Commodities
Gold		$1,715			$1,710
OIL		$86.25			$86.81
Option Volatility
Canada
O/N		9.28%			10.00%
1 Week		7.04%			7.55%
1 Month		7.00%			7.10%