GFX Morning Commentary September 5th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0460-1.0540

Today’s expected range for the Canadian Dollar against the Euro is 1.3830-1.3900

Today’s expected range for the Canadian Dollar against Sterling is 1.6380-1.6460

The US Dollar is mixed this morning in narrow trading ranges. In the UK the Bank of England kept its key interest rate at 0.5% and kept its bond purchasing program at 375 Billion Pounds. There were no surprises here as BOE Governor Carney linked a rise in interest rates to a reduction in unemployment and inflation remaining in check, the Pound traded slight higher with GBP.USD trading to 1.5660 and GBP.CAD trading to 1.6435. The minutes from this meeting will be released in two weeks.

The other big mover overnight was the Japanese Yen which briefly weakened above the 100.00 mark against the US Dollar. The Bank of Japan kept interest rates unchanged and indicated that they felt the economy was improving faster than they had hoped. The Bank of Japan has been hoping for a very weak Yen to help the export market so these kinds of reports seem to improve that situation.

As I write the European Central Bank announced this morning that they are keeping their interest rates at 0.5% so no surprises there. ECB Governor Draghi give his press conference at 08:30 so that may get the attention of the currency markets if he moves the direction of the bank in any way.

The Canadian Dollar is unchanged this morning against the US Dollar, I think yesterday’s Bank of Canada report left most investors and currency traders with a very empty feeling, the statement was very bland without any real guidance,  I certainly hope this will not be an ongoing characteristic of the new Poloz regime. With USD.CAD right were we left it yesterday the focus will now shift to the Canadian and US employment reports due out tomorrow, investors will be looking to see if the US can maintain the pace of employment that the economy has been experiencing.

Up today we do get the ADP employment report (a report of private employers) for the month of August along with some secondary US data.  If we get some surprises we could see some volatility this morning but for the most part I still favour a slow grind higher for USD.CAD ahead of tomorrow’s employment numbers.

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0481			1.049
CAD/USD		0.9541			0.9533
EUR/USD		1.3213			1.3183
EUR/CAD		1.3852			1.3829
STG/CAD		1.6377			1.6382
AUD/CAD		0.9588			0.962
CAD/JPY		95.27			0.9484
CAD/CHF		0.8939			0.8922
CAD/HKD		7.3932			7.388
CAD/CNY		5.835			5.8292
CAD/MXN		12.7724			12.7265
Commodities
Gold		$1,395.00			$1,403.00
OIL		$107.75			$107.79
US DOLLAR INDEX
P.CLOSE		82.2			82.38
OPEN		82.2			82.29
US 10YR YIELD		2.89%			2.85%