GFX Morning FX Commentary October 3rd, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9800-.9875

Today’s expected range for the Canadian Dollar against the Euro is 1.2710-1.2800

Today’s expected range for the Canadian Dollar against Sterling is 1.5870-1.5850

The US Dollar is weaker against the Euro this morning but stronger against the Canadian Dollar which is something we usually don’t see. In Europe, the Euro rallied stronger on a positive Retail Sales report and the growing expectation that Spain will shortly ask for a full EU bailout. The optimism was short-lived as a poor Service Industry report showed the EU economy is still contracting. Euro markets were also squaring up ahead of the EU interest rate announcement due out tomorrow morning, currency traders will continue to look to Governor Draghi’s press conference to understand what he thinks about the EU economy.

The Canadian Dollar is weaker against the USD as USD.CAD looks like it wants to break above the .9850 level for the first time in a while. The Loonie and other commodity currencies traded weaker when the Chinese government reported a declining  services sector, the so called commodity economies (Canada, Australia, New Zealand)  are generally perceived to be at a greater risk to a slowdown in the Chinese economy, any poor economic reports out of China will continue to weigh on the Loonie.

This morning we are awaiting the release of the Fed’s minutes from their last meeting, the one in which they announced QE3, I think market pundits will be looking for any discourse among the committee about the US economy. We also get the US ISM non-manufacturing report and the ADP employment report (140k new jobs expected) so we may continue to have an active morning. I am not sure tonight’s 1^st Presidential will have any effect on the currency markets, it certainly looks that it is Obama’s election to lose, only a Romney rise from the ashes will get any notice from currency traders.

For today we should see USD.CAD move a bit higher to start the day, if you have been holding off waiting for better levels to see some USD I would suggest that you look at this move and think about leaving some orders, if we continue up to .9900 you might want to take advantage of that move, we have seen in the past just how quickly the Canadian Dollar can recover so you don’t want to miss this opportunity.

 

Have a great day

Mike

GFX Morning Currency Rates
Wednesday October 03, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9863			0.9817
CAD/USD		1.0139			1.0186
EUR/USD		1.2915			1.2924
EUR/CAD		1.2739			1.2688
STG/CAD		1.5897			1.5862
AUD/CAD		1.0053			1.0096
CAD/JPY		79.27			79.52
CAD/CHF		0.9444			0.953
CAD/HKD		7.8571			7.89
CAD/CNY		6.4127			6.4392
CAD/MXN		13.0704			13.06
Commodities
Gold		$1,782			$1,782
OIL		$91.44			$92.63
Option Volatility
Canada
O/N		9.57%			11.05%
1 Week		7.21%			7.89%
1 Month		7.11%			7.29%