GFX Morning FX Commentary May 31st, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0290-1.0370

Today’s expected range for the Canadian Dollar against the Euro is 1.3400-1.3475

Today’s expected range for the Canadian Dollar against the Sterling is 1.5700-1.5775

The US Dollar is mixed this morning as it is stronger against the Euro and weaker against Sterling and the Yen,  in Europe, the Euro fell to a three-week low as both Germany and the EU reported overall worrying economic news. In Germany, Retail Sales fell 0.4% from their levels in March which itself declined 0.1%, in the EU unemployment rose to 12.2% in March which I believe is a record high. It is not reported but I believe if you just factor in youth unemployment in the region it might be closer to 25%, these are very worrying number’s and will border on social upheaval if not addressed. You have heard me mention this before that I do not believe the current EU leadership has the necessary skills to solve this problem and matters should only get worse. If Merkel loses the election this fall in Germany then I think the situation will get very ugly in Europe, I read one report today on Bloomberg that is calling for EURO.USD to hit 1.21 (current 1.3000) in a year.

The Canadian Dollar is weaker against the US Dollar this morning but when you consider how other so called commodity currencies are foreign the Loonie is doing incredibly well, the South African Rand, Australian Dollar and New Zealand Dollar have all been hammered in recent weeks on fears that a slowdown in Global demand for commodities will hurt these economies. This is the main reason that I think US Dollar buyers should be looking at 1.0300 as a good level to put forward contracts on, if the Loonie decides to play catch up with these other currencies then we could see USD.CAD really jump higher.

Up today we get the Canadian GDP report for April and the first quarter. We are expecting a monthly growth rate of 0.1% and a quarterly annualized growth rate of 2.3%. Not numbers that will make the world stand up and take notice but if they disappoint the markets today look for USD.CAD to hit 1.0400 at some point, if they are positive I think we will see a slow grind back below 1.03000.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0344			1.035
CAD/USD		0.9667			0.9662
EUR/USD		1.2994			1.2983
EUR/CAD		1.3443			1.3441
STG/CAD		1.5729			1.5684
AUD/CAD		0.992			0.997
CAD/JPY		97.2			97.95
CAD/CHF		0.9218			0.9274
CAD/HKD		7.4848			7.4768
CAD/CNY		5.9276			5.9201
CAD/MXN		12.4759			12.2567
Commodities
Gold		$1,411.00			$1,400.00
OIL		$93.18			$92.71
US DOLLAR INDEX
P.CLOSE		83.05			83.67
OPEN		83.3			83.52

 

GFX Afternoon Update May 30 2013

Good Afternoon

The Canadian Dollar has retreated from yesterday's highs against the US Dollar back to the level that was traded at on Friday. This move was initiated by weak GDP numbers from the US and a stronger Canadian current account. These combined to weaken the US Dollar and move away from highs that were reached yesterday. A weaker US Dollar caused the Euro to strengthen and it looks like it will remain at this level for some time. The Euro was unable to use its strength from a weaker US Dollar to help it strengthen against the Canadian Dollar which continues its trend of slowly strengthening. These pairings look like they will trade at this high level for the rest of the day as the most significant data for the day was already released and there is nothing else scheduled for release that will push it out of the range.

The significant release this morning was the US GDP numbers which came in weaker than expected at 2.4%. In addition to GDP numbers the US has released their initial jobless claims which was lower than expected at 354K. These two releases have weakened the US Dollar against all currencies and may slow talks of tapering Quantitative Easing. 

Tomorrow the Canadian GDP numbers will be released which could erase today's move if it comes in weaker than expected. The other big release tomorrow is the EU CPI which could cause some volatility in the Euro when it is released. 

Yonah

GFX Morning FX Commentary May 30th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0330-1.0420

Today’s expected range for the Canadian Dollar against the Euro is 1.3400-1.3475

Today’s expected range for the Canadian Dollar against Sterling is 1.5650-1.5720

Apologies for yesterday, it seems I had a little trouble with the cut and paste feature and inadvertently  I sent out Tuesday’s commentary.

The US Dollar is  marginally stronger this morning as once again the Yen dominated currency trading overnight. This time it was several comments from a Japanese Government official that stated the recent rise in the Nikkei Stock Exchange was too fast and that the IMF is supporting the Japanese Government’s stimulus policy. Right after these comments the Nikkei plunged 5% and the Yen dropped over 100 points against the Greenback, is it any wonder why politicians are better served when they keep their mouth shut.

The Euro is marginally lower to start the day but really had a very quiet night, the Loonie continues to lose a bit of ground to the Euro as EURO.CAD looks set to break above 1.3400, Euro buyers should be ready and leave their orders if we see a break back towards 1.3300 in the coming days.

Yesterday saw Mark Carney ride off into an English sunset with a statement that was much like the previous ones, interest rates are appropriate for the time being but the next change in interest rates will be a move higher. There was no timeframe on when this is going to happen but with the likelihood of US stimulus being reduced sooner than later we could see an interest rate hike in Canada towards the end of the year.

We have a busy economic calendar today with the US GDP report for the first quarter headlining the day. We are expecting a growth rate of 2.5% on an annualized basis, markets will be looking for any sign of improvement on that number, especially after the strong housing numbers early in the week.  We have a slew of secondary data out as well today so we could have a very volatile morning, if we see a strong GDP report it could be the catalyst to push USD.CAD above the 1.0400 level.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.035			1.039
CAD/USD		0.9662			0.9625
EUR/USD		1.2983			1.2924
EUR/CAD		1.3441			1.3428
STG/CAD		1.5684			1.5638
AUD/CAD		0.997			0.9985
CAD/JPY		97.95			97.6
CAD/CHF		0.9274			0.93
CAD/HKD		7.4768			7.4553
CAD/CNY		5.9201			5.894
CAD/MXN		12.2567			12.206
Commodities
Gold		$1,400.00			$1,386.00
OIL		$92.71			$94.45
US DOLLAR INDEX
P.CLOSE		83.67			84.3
OPEN		83.52			83.65

 

 

GFX Afternoon Update May 29 2013

Good Afternoon

The Euro has been trading in a narrow range after the release of two reports from Germany offset each other. German CPI came in better than expected while the unemployment rate came in lower than expected, so not much action for the euro

The Bank of Canada announced their interest rate decision, which as expected was unchanged. One surprise was this announcement was expected to include indications that Canada would drop their tightening bias which did not happen. The Bank of Canada decided to maintain their current policy causing the Canadian Dollar to weaken.

Without any news to shake up the market most currency pairs have been stuck in ranges. Some of the news released today was expected to create some volatility in the market but this has disappointed and has not pushed it out of its ranges. 

Yonah

GFX Morning FX Commentary May 29th, 2013

Good Morning,

 

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0350-1.0450

 

Today’s expected range for the Canadian Dollar against the Euro is 1.3420-1.3520

 

Today’s expected range for the Canadian Dollar against Sterling is 1.5625-1.5757

 

The US Dollar is weaker to start the day in very active currency markets. Getting the ball rolling was the Governor of the Bank of Japan who stated that a “stable financial system is very important”, he says this at a time when his institution is adding unprecedented stimulus to the economy. Investors got very nervous on this statement and USD.JPY dropped over 150 points in a matter of minutes, the Euro was also able to benefit on this statement as EURO.USD rose to trade at 1.2960,  A very busy night with investors increasingly concerned with global growth.

 

Of an interesting note is that the Australian Dollar continues to get hammered on the world’s currency markets, AUD.USD traded to a low of .9540 last night, just a month ago AUD.USD was trading at 1.0300. The move last night was caused by the IMF downgrading growth expectation in China, you can see just how closely they two economies are tied. When you consider how far the Aussie has fallen the Loonie looks like a star as it continue to hold in above parity.

 

The Canadian Dollar is slightly stronger from our close last night and has not been able to break higher so far. The Loonie has not been faring as well against the Euro as EURO.CAD is now up above 1.3400 for the first time in  a while, the Euro has been the clear overnight winner with nervous markets and a weak US Dollar.

 

A quick note on yesterday, we saw the US housing prices jump over 10% year over year and that is the biggest jump in the US housing market since 2006, I have always maintained that you won’t see a recovery take hold in the US until you see a recovery in the housing market and we are now starting to see that. Over the next few weeks we will see more pressure mounting for the US Federal Reserve to start pulling back on their stimulus program but investors again were made nervous last night when the OECD (Organization for Economic Development) caution governments not to end stimulus too early. I think we will see choppy markets for some time yet.

 

Up today we get the latest release on interest rates from the Bank of Canada and this will be Mark Carney last announcement as the Governor of the Bank, he heads off to London to take over the Bank of England July 1^st. There is no added significance to this being is last announcement, it is expected to be status quo, no interest rate changes and a very similar forward looking economic statement. If we do get any surprises then the currency markets could see extreme volatility as they are already nervous from the overnight session.

 

I will send out a currency alert shortly after the Bank announcement.

 

Have a great day

Mike

 

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.039			1.0336
CAD/USD		0.9625			0.9671
EUR/USD		1.2924			1.2928
EUR/CAD		1.3428			1.3365
STG/CAD		1.5638			1.5617
AUD/CAD		0.9985			1.0005
CAD/JPY		97.6			98.64
CAD/CHF		0.93			0.9362
CAD/HKD		7.4553			7.4892
CAD/CNY		5.894			5.9265
CAD/MXN		12.206			12.0646
Commodities
Gold		$1,386.00			$1,379.00
OIL		$94.45			$94.71
US DOLLAR INDEX
P.CLOSE		84.3			83.74
OPEN		83.65			83.85

 

 

GFX Afternoon Update May 28 2013

Good Afternoon 

The US Dollar strengthened against most currencies after the US consumer confidence report was released. After reaching a peak the US Dollar has traded in a higher range and should remain there for the rest of the day. 

The Consumer Confidence report was released and came in better than expected at 76.2. This high number for the consumer confidence report comes from a stronger US housing market which is currently at a seven year high, increasing the value of the US Dollar against all currencies. Strong consumer confidence and housing market may restart talks of quantitative easing which can take place as early as June. If the FOMC decides to reduce quantitative easing in June this may lead to further increases in the value of the US Dollar.

We are waiting for tomorrow when the Bank of Canada will announce interest rates and the Germany will release their Unemployment data. When these are released we can expect to see some volatility from markets that are waiting for any news to cause movement.

Yonah

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0300-1.0360

Today’s expected range for the Canadian Dollar against the Euro is 1.3350-1.3425

Today’s expected range for the Canadian Dollar against Sterling is 1.5600-1.5660

The US Dollar is marginally weaker this morning in quiet overnight markets. The Euro jumped to trade at a high of 1.2950 as there were reports that Spain will be given until 2016 to get their budget deficit in line with EUR rules of 3% of GDP, most Euro watchers were paying attention to the EU foreign ministers agreeing to lift the ban on providing weapons to the Syrian opposition, of course Russia came out swinging against this decision so look for that country to start supplying even more weapons to the Assad regime, peace does not look optimistic in the near future.  The biggest  moving currency  overnight was the Yen which weakened once again against the Greenback as Japanese officials stated that there is more room to provide stimulus if needed, Overall a very quiet night for most currency traders.

The Canadian Dollar had a very quiet night as USD.CAD hangs in above the 1.0300 level. The Loonie is much weaker than where I left it before going to Spain a move which was very quick and violent based on the overall stronger US dollar. I think we will sit at these levels for a while now providing that we do not get any surprises from Mark Carney’s final interest rate announcement tomorrow but US Dollar buyers need to be concerned that a further jump in the US Dollar across the board could easily move USD.CAD up towards 1.0400.

Up today we get the release of the US Consumer Confidence report for February, I will be looking to see how the recent spate of poor economic reports is affecting the consumer in the US, a very poor number could hit equity markets hard and bring some added volatility to the currency markets.

Thanks to everyone who welcomed me back yesterday, we had a great trip to Spain with a quick stop in Gibraltar which was interesting to see. We were down in a town called Sotogrande which is an hour south of Malaga near the Gibraltar border and it is a region that is primarily a tourist area with lots of golf courses and hotels. My first impression was that there was very little new construction going on and quite a few projects that had been abandoned during construction, when we were back in Spain 4 years ago I think in one town alone I remember see some 30 construction cranes, I think I saw two on the whole trip this year. An area such as this would thrive on new housing developments targeted at foreigners and I really did not see a any of that going on, a few billboards here and there but no real activity, it certainly looks like the English and Germans are not travelling as much as they did. It may have been because it was off season in Sotogrande but the hotels seemed very quiet and the golf courses were quite empty, hopefully the summer season will be better for them. If anyone would like any information on the region just drop me an email and I will be glad to help, we had a great time and I think will head back there in the future.

We did a quick tour of Gibraltar and found out that after the border being closed for quite a few years back in the 70’s and 80’s some 10,000 Spaniards now make the trip to Gibraltar every day for work, from what I could see it is pretty much an open border with very little passport control, the two economies are very intertwined. As a financial center I should explore opening GFX Gibraltar and see what opportunities lie there, It looked like a great place to live!!

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0336			1.0322
CAD/USD		0.9671			0.9688
EUR/USD		1.2928			1.2945
EUR/CAD		1.3365			1.3365
STG/CAD		1.5617			1.5623
AUD/CAD		1.0005			0.996
CAD/JPY		98.64			97.64
CAD/CHF		0.9362			0.9317
CAD/HKD		7.4892			7.4986
CAD/CNY		5.9265			5.9273
CAD/MXN		12.0646			12.4848
Commodities
Gold		$1,379.00			$1,392.00
OIL		$94.71			$93.57
US DOLLAR INDEX
P.CLOSE		83.74			83.7
OPEN		83.85			83.6

 

GFX Afternoon Update May 24 2013

Good Afternoon

US Durable Goods Orders were released this morning and were higher than expected at 3.3%, surpassing expectations. This strengthened the US Dollar against most currencies including the Euro, which had its gains from positive German IFO data reversed from the durable goods report. The US Dollar strengthened against commodity currencies but was weaker against European currencies. 

The Canadian Dollar has been trading in a range against the US Dollar and is stuck there for now ahead of Memorial Day Weekend. As we head into the Memorial Day weekend the markets are quiet as investors do not take big positions. Most currencies are stuck in ranges which will likely continue for the rest of the day and into the weekend. EUR.CAD has moved down back into the range that it was trading in yesterday. 

The USD.JPY has gone down as the day goes on in a steady climb down from the highs that were reached at the beginning of the week. The Yen has appreciated as people begin to look at it as a safe haven currency along with the Swiss increasing its value. 

Have a good weekend

Yonah

GFX Morning Commentary May 24th, 2013

Good Morning,

Today’s suggested range for the Canadian dollar against the US Dollar 1.0300 – 1.0375

Today’s suggested range for the Canadian dollar  against the Euro 1.3370 – 1.3440

Today’s suggested range for the Canadian dollar  against Sterling 1.5600 – 1.5670

In the Asian session the Japanese Yen gained for a second straight day against the US Dollar attracting some repatriation flows from the Nikkei upheaval yesterday along with safe haven attraction. The Nikkei gained 0.9% overnight after initially dropping 3.5%.

In Europe the single currency strengthened against the USD dollar on better than expected German IFO data showing the business climate index improved to 105.70 from 104.40 in April. The only group of currencies underperforming the US Dollar overnight is the commodity sector currencies. Several banks are lowering their currency forecasts on the AUD, CAD and NZD for year end.

The North American opening is waiting on U.S. durable goods data at 8:30am with expectations of a 1.7% rise after falling 5.7% the previous month. The Canadian dollar is weaker against its U.S. counterpart but remains within recent ranges, but lost considerable ground overnight against the Euro and British Pound with both cross pairs gaining 100 pips. There is no economic releases in Canada and the next focal point will be the Bank of Canada interest rate decision next Wednesday which will hold interest rates steady but will be closely watched to see if they drop their tightening bias. Dow futures are pointing lower by 55 in pre-market with both gold and oil marginally lower. Today could see some whippy price action as the markets thin out ahead of the U.S. long weekend.
For today's FX opening FX rates and other FX resources please visit our Blog.  

Have a great weekend!

GFX Morning Currency Rates
Friday May 24, 2013
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0348			1.0331
CAD/USD		0.9664			0.968
EUR/USD		1.2972			1.2891
EUR/CAD		1.3429			1.3322
STG/CAD		1.5665			1.5585
AUD/CAD		1.0012			1.0039
CAD/JPY		98.05			98.25
CAD/CHF		0.9286			0.9348
CAD/HKD		7.4791			7.4925
CAD/CNY		5.9237			5.938
CAD/MXN		12.0257			12.0873
Commodities
Gold		$1,385.00			$1,390.00
OIL		$93.60			$93.39
US DOLLAR INDEX
P.CLOSE		83.79			84.36
OPEN		83.59			84