GFX Morning Commentary July 5th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0480-1.0580

Today’ expected range for the Canadian Dollar against the Euro is 1.3550-1.3650

Today’s expected range for the Canadian Dollar against Sterling is 1.5760-1.5860

The US Dollar is higher this morning as both Euro and Sterling are under pressure this morning. Both the Bank of England and the European Central Bank yesterday indicated that interest rates will stay low for quite some time and in fact ECB Governor Draghi hinted that Euro interest rates could go lower. The Euro was also hit this morning on poor Factory Orders out of Germany, they declined for the 2^nd straight month. Once again as soon as the Euro-Zone quiets down something hits the market and off the Euro goes again, we still look for the Euro to trade weaker.

Trading today will be dominated by the US Employment report, markets will be paying close attention to the number and analyzing what it means for the Federal Reserve plan to taper their stimulus program. We are expecting 165K new jobs to have been created with the jobless rate dropping by 0.1% to 7.5%, funny enough I think if this number disappoints it should push equities higher as it will be less likely for a quick slowdown on the Fed’s stimulus program.

The Canadian Dollar is weaker this morning but continues to trade within recent ranges, topped at 1.0550 and supported at 1.0475. I think today we will get a break either side of this range and it will depend more on the US Jobs report than the Canadian report. In Canada we are expecting a drop in employment of 7,500 jobs (after creating 95K jobs last month) with no accompanying change in the unemployment rate of 7.1%. A strong report for Canada should give the Loonie a bit of a boost but it will be overshadowed by the US report.

Just a note oil is trading above $101 a barrel and having no effect on the Loonie, there does not seem to be any correlation at the moment.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0543			1.053
CAD/USD					0.9497
EUR/USD		1.2879			1.3004
EUR/CAD		1.3585			1.3698
STG/CAD		1.5793			1.5994
AUD/CAD		0.9663			0.9615
CAD/JPY		94.77			94.66
CAD/CHF		0.9091			0.9008
CAD/HKD		7.3321			7.3424
CAD/CNY		5.851			5.821
CAD/MXN		12.9171			12.2501
Commodities
Gold		$1,237.20			$1,250
OIL		$101.45			$101
US DOLLAR INDEX
P.CLOSE					83.65
OPEN		84.25			83.56