GFX Morning FX Commentary September 19th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0160-1.0250

Today’s expected range for the Canadian Dollar against the Euro is 1.3800-1.3870

Today’s expected range for the Canadian Dollar against Sterling is 1.6380-1.6450

The US Dollar is significantly weaker as the overnight markets continue to react to the surprising news that the US Federal Reserve was not going to cut back on their Stimulus program, EURO.USD has jumped to trade at 1.3570 and GBP.USD continues to march upward trading to 1.6140 overnight. Sterling did give up some gains after the August Retail Sales report was very disappointing and it dropped the most it has in the last four weeks.

Much like North America, the Far East and European stock markets loved the fact that the Fed was not reducing the stimulus program and they all jumped much higher. I am not sure how long this euphoria will last, at some point the Fed will have to act and I think that day is coming soon. I will continue to watch the US unemployment rate, as it drops the likelihood of the Fed acting will increase.

The Canadian Dollar is much stronger this morning against the Greenback as it was able to extend its gains from yesterday, but I would caution US Dollar buyers that continue to wait for better levels, this move was solely a reaction to the unexpected move by the Federal Reserve and has nothing to do with the Loonie or the Canadian economy. I have seen these types of moves over the years and they rarely can be sustained over the long-term, I will keep watching the developments with the UD Dollar but I think we will see some kind of a pull-back higher over the next few sessions. Short-term US Dollar sellers unfortunately need to revise their expectations, sellers have had a good run over the last couple of months and while I think we will see higher rates a few months out for now if you need to do something in the next few weeks you should be looking at 1.0250 to 1.0300 as possible pullbacks for the US Dollar.

Up today we get some secondary data out of the US so we may see some volatility surrounding their release, if we continue to get strong data out of the US I think that will point to a better recovery and higher chances that the Fed will cut back on stimulus at some point.

Some good news for the Canadian economy this morning, Ford has announced a $700m investment in the Oakville assembly factory which will create some 2500 jobs, nice to see that kind of investment in an important industry.

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0196			1.0298
CAD/USD		0.9808			0.971
EUR/USD		1.3554			1.3352
EUR/CAD		1.3822			1.3752
STG/CAD		1.6392			1.6447
AUD/CAD		0.9697			0.9633
CAD/JPY		96.98			96.02
CAD/CHF		0.892			0.8991
CAD/HKD		7.602			7.5229
CAD/CNY		7.6026			3.9985
CAD/MXN		12.3164			12.569
Commodities
Gold		$1,365.63			$1,302.00
OIL		$108.66			$106.20
US DOLLAR INDEX
P.CLOSE					81.3
OPEN		80.23			81.26
US 10YR YIELD		2.71%			2.84%