GFX Morning FX Commentary October 17th, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0265-1.0330

Today's expected range for the Canadian Dollar against the Euro is 1.4030-1.4100

Today's expected range for the Canadian Dollar against Sterling is 1.6550-1.6620

The US Dollar is weaker this morning against the Euro and Sterling even as the curtain draws closed on the latest drama out of Washington. Lovers of drama need not fear this exact same production will be back on air towards the end of the year. The true cost of the crisis will now start to emerge, it looks like the cost of the shutdown to GDP  will be around 24 Billion dollars, the US Federal Reserve is expected to back off their cutback to the stimulus program and I would think large hedge funds will become increasingly reluctant to fund the US Government by holding US treasuries in their portfolios. As Stanley once said to Ollie "this is another fine mess you got me into".

The Pound is also quite a bit stronger as the UK Retail Sales report came in much stronger than expected, once again we are seeing strong numbers out of the UK economy.

I would expect the next couple of days to be busy ones for the economist’s as the US will start to catch up on the economic statistics that were delayed, with the most important being the September employment report. I am guessing that it will be released tomorrow but nothing has been announced yet.

As we expected the Canadian Dollar has pulled back a little strength on the Washington deal, I do not believe for a second that the fundamentals of the Canadian economy warrant a big rally for the Loonie so I would expect that USD.CAD will hover around the 1.0300 level for a while.

Up today we were scheduled to have a slew of economic data out of the US but I doubt that will happen as the employees get caught up, I look for USD.CAD to trade on both sides of the 1.0300 for the day as the effects of the latest crisis die down.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.03			1.0365
CAD/USD		0.9709			0.9648
EUR/USD		1.3621			1.3545
EUR/CAD		1.4033			1.4079
STG/CAD		1.655			1.6608
AUD/CAD		0.9899			0.988
CAD/JPY		95.13			94.84
CAD/CHF		0.9775			0.8793
CAD/HKD		7.5218			7.4804
CAD/CNY		5.9166			5.8867
CAD/MXN		12.4709
Commodities
Gold		$1,305.00			$1,283.00
OIL		$101.77			$101.25
US DOLLAR INDEX
P.CLOSE		80.58
OPEN		80.01			80.44
US 10YR YIELD		2.63%			2.72%