GFX Morning FX Commentary, June 27th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0410-1.0480

Today’s expected range for the Canadian Dollar against the Euro is 1.3600-1.3675

Today’s expected range for the Canadian Dollar against Sterling is 1.5950-1.6025

The US Dollar is marginally weaker this morning as the markets slowly digest the poor US GDP report from yesterday. With the US economy growing at a slower rate than anticipated investors may have jumped the gun in thinking that the US Federal Reserve will start to taper their stimulus program sooner than later, with poor growth there is no way that US unemployment will get below the magic 7.0% unemployment level needed for the Fed to start withdrawing stimulus in the near future. Ever so slowly we have seen the stock markets move higher and the US Dollar give back some gains.

Sterling dropped to its lowest level in a week as the UK GDP report came in lower than expected, once again we see the UK report poor numbers just as the currency had started to gain some momentum.

The Canadian Dollar had a narrow overnight trading range and now looks like it is slowly starting to recover. If Canada can report relatively strong GDP numbers tomorrow then I will not be surprised to see USD.CAD move back below 1.0400. I am also beginning to see a bit of a trading pattern emerge for the Canadian Dollar, when USD.CAD first jumped above parity a while back it went to a high of 1.0200 and then it settled in around 1.0050 for a long time, the next time it really weakened we saw USD.CAD jump to 1.0400 before slowly pulling back to 1.0150 where it spent a long time trading back and forth, this time we have seen USD.CAD get above 1.0500, so if the trading pattern holds in we could see USD.CAD slowly grind back to 1.0250/1.0300, sit there for a while before the next possible bout of weakness, just an interesting observation for what it is worth.

Up today we get some secondary US data including Personal Expenditures, if these numbers disappoint and follow up on the poor GDP data from yesterday we may see USD.CAD pullback quickly to the 1.0400 level. I am still watching US interest rates and the 10 year bond is still trading quite high, if that drops then USD.CAD will surely fallback.

There will not be a commentary tomorrow as I am going to get an early jump on the holiday weekend, have a safe and happy Canada Day. Just a reminder that the International currency markets will be open on Monday and can be quite volatile so make sure you have your orders in ahead of the weekend.

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0453			1.0487
CAD/USD		0.9566			0.9535
EUR/USD		1.302			1.3015
EUR/CAD		1.3613			1.3647
STG/CAD		1.5971			1.6105
AUD/CAD		0.9714			0.9727
CAD/JPY		93.82			93.04
CAD/CHF		0.9045			0.8974
CAD/HKD		7.399			7.379
CAD/CNY		5.8796			5.8576
CAD/MXN		12.5338			12.6506
Commodities
Gold		$1,228.00			$1,227.00
OIL		$95.68			$94.84
US DOLLAR INDEX
P.CLOSE		83.21			82.79
OPEN		83.18			83.08
US 10YR YIELD		2.54%			2.59%