GFX Morning FX Commentary June 4th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0280-1.0370

Today’s expected range for the Canadian Dollar against the Euro is 1.3480-1.3570

Today’s expected range for the Canadian Dollar against Sterling is 1.5770-1.5850

The US Dollar is mixed to start the day as expectation that the US Federal Reserve will not cut short their stimulus program any time soon and comments from the Bank of Japan aimed at weakening the Yen continued. Overnight Equity markets were higher on the expectation that after poor manufacturing data yesterday the US Federal Reserve will need to keep the taps open longer than was expected, there had been hints flying around that the Fed would start to pare back their monthly bond purchases but that expectation may now be dimming.  EURO.USD jumped to trade at 1.3095 while USD.JPY rose to trade back above 100 so overall a mixed night for the US Dollar.

The Australian Dollar had a wild ride last night as the Reserve Bank of Australia kept interest rates unchanged but signaled that their next interest rate move will most likely be lower, this flies in the face of last Bank of Canada report that said the next move will most likely be higher, AUD.USD and AUD.CAD both fell over 100 points on this report.

The Canadian Dollar is weaker this morning as it could not hold onto the quick strength it produced yesterday, with the weakness in the Aussie Dollar it was not surprising that USD.CAD moved back higher overnight. In order for the Loonie to have any sustained strength I think it needs USD.CAD to hold in today and not trade above 1.0330, then possibly we will USD.CAD settle back in below 1.0300. If it breaks higher then I don’t think we will have any further short-term Canadian Dollar strength ahead of Friday’s employment reports.

Up today we get some trade data out of Canada and the US which could see some added volatility come to the market, I still favour a move higher for USD.CAD but if we do see it break back below 1.0300 this morning US Dollar buyers should be ready to jump all over that.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0319			1.0351
CAD/USD		0.9625			0.966
EUR/USD		1.3084			1.3013
EUR/CAD		1.3504			1.3472
STG/CAD		1.5785			1.579
AUD/CAD		0.9972			0.9988
CAD/JPY		0.9702			0.9694
CAD/CHF		0.9187			0.9237
CAD/HKD		7.5			7.4799
CAD/CNY		5.9375			5.9205
CAD/MXN		12.3187			12.3667
Commodities
Gold		$1,400.00			$1,395.00
OIL		$92.93			$92.43
US DOLLAR INDEX
P.CLOSE		82.72			83.31
OPEN		82.78			83.25