GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1160-1.1240

Today’s expected range for the Canadian Dollar against the Euro is 1.5120-1.5200

Today’s expected range for the Canadian Dollar against Sterling is 1.8400-1.8470

The US Dollar is marginally stronger this morning as the flight of money from emerging market economies and a US economy that is still recovering are all helping to push the US Dollar to its best overall monthly performance since January of 2010. Given the current market conditions there is no reason to think this will trend will reverse anytime soon.

The Euro is a bit weaker also on the back of lower than expected inflation in the Euro-Zone. The inflation rate is almost half of what the ECB has targeted and there are calls mounting for the EU to again cut interest rates and drive the Euro lower. Just as we have seen here in Canada a weak Euro will help to drive inflation higher in the Euro-Zone.

The Canadian Dollar is weaker this morning and it looks set to test the 1.1200 level at some point, once again the Loonie has not been able to create any kind of a serious rally and still looks very vulnerable to trading much weaker in the coming days. Up today we get the release of the important Canadian GDP data for November, we are expecting a monthly growth rate of 0.2% with a year over year rate of 2.6%, a number that is lagging growth in the US. If the number is below expectation then USD.CAD will easily break above the 1.1200 level and start its march to 1.1300, if it is slightly better than expectation then I think we will see the Loonie rally back towards 1.1150.

We also have some secondary data out of the US and month-end flows so we could see some enhanced volatility throughout the day.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1194			1.1182
CAD/USD		0.8933			0.8943
EUR/USD		1.355			1.3595
EUR/CAD		1.5169			1.5209
STG/CAD		1.8427			1.8445
AUD/CAD		0.9758			0.9812
CAD/JPY		91.29			91.61
CAD/CHF		0.8058			0.8042
CAD/HKD		6.9139			6.9224
CAD/CNY		5.4123			5.4182
CAD/MXN		12.0262			11.9567
Commodities
Gold		$1,248.00			$1,254.00
OIL		$97.79			$97.79
US DOLLAR INDEX
P.CLOSE		80.98			80.57
OPEN		81.05			80.86
US 10YR YIELD		2.66%			2.70%

 

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1140-1.1220

Today’s expected range for the Canadian Dollar against the Euro is 1.5170-1.5250

Today’s expected range for the Canadian Dollar against Sterling is 1.8410-1.8500

The US Dollar is stronger this morning as the currency market is playing out much the way we thought it would after the Federal Reserve announced that they would continue to taper stimulus at the $10B a month pace. Global stocks market are all lower hitting 2½ month lows with the Dow Jones down over 180 point yesterday. Both EURO.USD and GBP.USD traded weaker with the Euro falling to 1.3580 against the Greenback, flows continue to move into safe haven currencies as investors see if the reduced stimulus is having an effect on US growth.

The Canadian Dollar continues to trade weaker this morning but in less volatile ranges, the Loonie is going to trade weaker over the short-term especially with the overall trend for a stronger US Dollar remaining in place. I can easily see that USD.CAD will test the 1.1200  level at some point today or tomorrow.

Trading today will be focused around the US 4^th Quarter GDP growth, on an annualized basis we are expecting US growth to drop from the previous high of 4.1% to 3.6%, (this number most likely will not yet reflect the Fed’s first month of tapering in December, that will most likely come in the first quarter of 2014) if this is a poor number investors will get nervous and stocks will get hit hard and the US Dollar will jump on the safe haven effect. Either way I think we will see enhanced volatility surrounding this release, make sure you have your orders in place.

Have a great day

Mike
msmith@gfxpartners.ca

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1182			1.1148
CAD/USD		0.8943			0.897
EUR/USD		1.3595			1.3659
EUR/CAD		1.5209			1.5229
STG/CAD		1.8445			1.8445
AUD/CAD		0.9812			0.9749
CAD/JPY		91.61			92.09
CAD/CHF		0.8042			0.8054
CAD/HKD		6.9224			6.9451
CAD/CNY		5.4182			5.4294
CAD/MXN		11.9567			11.9629
Commodities
Gold		$1,254.00			$1,258.00
OIL		$97.79			$97.13
US DOLLAR INDEX
P.CLOSE		80.57			80.56
OPEN		80.86			80.6
US 10YR YIELD		2.70%			2.76%

 

 

 

 

GFX Currency Alert

Good Afternoon,

As expected this afternoon the US Federal Reserve announced that they would keep  US interest rates steady at 0.25% and continue to cut the stimulus package by $10B a month, this is the second such month of the cuts and the stimulus program is now down to $65B from a high of $85B

The Fed went on to say that the labor market is improving and interest rates will stay low until unemployment improves

The US dollar has reacted as much as we thought it would with USD.CAD rising a little  but overall the Dollar reaction is fairly muted, it is not running away.

If USD.CAD does not break through the 1.1200 level on this report we may see it pullback towards 1.1100

US Dollar seller s should leave their orders around the 1.1200 in case we get there, and US Dollar buyers should leave orders between 1.1150 and 1.1100

The next Fed meeting is scheduled for Early March.

Have a great evening

Mike

 

 

GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.1125-1.1225

Today's expected range for the Canadian Dollar against the Euro is 1.5200-1.5300

Today's expected range for Canadian Dollar against Sterling is 1.8440-1.8540

The US Dollar is little changed overnight in nervous currency markets ahead of the US Federal Reserve announcement later today. Emerging markets continue to be of concern, last night the Turkish Central Bank doubled their interest rates which seemed to stop the rapid decline of the Lira but the move had little effect on other emerging market currencies as they continued to trade with a weak bias. Both the Japanese Yen and Swiss Franc reported gains as flows moved out of the emerging markets and into the safe haven currencies

The Canadian Dollar is little changes as USD.CAD trades near the high of the year, it won't move all that much ahead of today's US Federal Reserve interest rate announcement this afternoon. The Canadian Dollar was weaker at one point during the night against the US and I think it was because Obama in his state of the Nation speech did not mention the Keystone pipeline, I get a sense that the anti-pipeline lobby is putting tremendous pressure on the administration which if the kill Keystone would be very bad for Canada.

We are expecting that since this is Chairman Ben Bernanke’s last meeting the Fed will keep interest rates at 0.25% and a Bloomberg survey of economists seems to think that they will continue with their reduction of stimulus by $10 Billion a month. If they surprise and announce more of a cut then USD.CAD will jump above 1.1200, if they announce that they are holding off on a cut the USD.CAD should drop back below 1.1100. If they perform as expected the US Dollar will gradually rise a little.

The best strategy for US Dollar buyers is to buy 50% of your short-term needs at current rates and them leave orders not far from the market to grab the rest, US Dollar sellers should leave orders between 1.1175 and 1.1200 to take advantage of any move higher this afternoon.

As always I will send out a currency alert.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1148			1.1114
CAD/USD		0.897			0.8998
EUR/USD		1.3659			1.3641
EUR/CAD		1.5229			1.5163
STG/CAD		1.8445			1.8397
AUD/CAD		0.9749			0.9781
CAD/JPY		92.09			92.78
CAD/CHF		0.8054			0.8041
CAD/HKD		6.9451			6.9639
CAD/CNY		5.4294			5.438
CAD/MXN		11.9629			11.9504
Commodities
Gold		$1,258.00			$1,255.00
OIL		$97.13			$96.19
US DOLLAR INDEX
P.CLOSE		80.56			80.49
OPEN		80.6			80.7
US 10YR YIELD		2.76%			2.78%

 

 

 

GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.1100-1.1180

Today's expected range for the Canadian Dollar against the Euro is 1.5180-1.5260

Today's expected range for the Canadian Dollar against Sterling 1.8430-1.8500

The US Dollar is stronger this morning led higher by a weaker British Pound. In the UK the government reported 4th quarter growth numbers slightly below expectation, it was still a favorable report but the fact that growth was a little less than some economists were predicting caused Sterling to drop, the short-term trend for Sterling will be to remain strong.

Currency markets continue to focus on the sell-off of emerging market currencies, the Argentina Government is limiting the purchase of US Dollars a month by individuals, India increased interest rates overnight and in Turkey the central bank is under fierce pressure to hike interest rates to stem the decline of the Lira, global investors are all running for the exit sign as they try and redeem investments in these countries.

With a stronger US Dollar overnight the Loonie is weaker this morning, this once again highlights my point that any signs of Canadian Dollar strength be short-lived and US Dollar buyers cannot afford to wait, they must be ready at all times with orders close to the market.

Up today we do get some Canadian Trade data but for the most part the currency market will get ready for two key US announcements, first is the State of the Nation address by the President tonight. Canadians will be looking for any notes on the Keystone pipeline, If he does announce that he favours it then I do believe the Loonie will get a bit of a boost. The 2^nd key announcement will be the Federal Reserve announcement tomorrow where most market economists are still expecting the Fed to announce further reduction in their stimulus program, a move which should push the stocks lower and the US Dollar higher,

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1114			1.1054
CAD/USD		0.8998			0.9046
EUR/USD		1.3641			1.3668
EUR/CAD		1.5163			1.5118
STG/CAD		1.8397			1.8324
AUD/CAD		0.9781			0.9667
CAD/JPY		92.78			92.93
CAD/CHF		0.8041			0.81
CAD/HKD		6.9639			7.0021
CAD/CNY		5.438			5.4681
CAD/MXN		11.9504			12.1155
Commodities
Gold		$1,255.00			$1,263.00
OIL		$96.19			$96.74
US DOLLAR INDEX
P.CLOSE		80.49			80.5
OPEN		80.7			80.5
US 10YR YIELD		2.78%			2.75%

 

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1000-1.1070

Today’s expected range for the Canadian Dollar against the Euro is 1.5060-1.5130

Today’s expected range for the Canadian Dollar against Sterling is 1.8050-1.8120

The US Dollar is mixed in overnight trading markets, Sterling and the Euro both traded higher at one point during the overnight session as business confidence in Germany is on the rise. Most of the overnight currency focus was again on the emerging market currencies in the wake of the Argentina Peso being devalued last week. The South African Rand is getting pummeled in a large part to a mining strike and the Turkish Central Bank has called an emergency meeting to deal with the record low level of the Turkish Lira, money is clearly flowing out the of the emerging markets and into more safe haven currencies like the US Dollar, Swiss Franc and Japanese Yen.

The Canadian Dollar is stronger this morning as the emerging market situation has taken the focus of the free-falling Loonie, USD.CAD is now some 150 points off its high from early last week. It has been a steady rally for the Loonie but the questions is how long will it last before it moves higher? If I was a US Dollar buyer I would employ some common sense and look to purchase someone of my requirements at current levels with the expectation that it could fall further and improve my overall average.

There is nothing of note on the economic calendar today so the Loonie should trade in a confined range.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1054			1.1077
CAD/USD		0.9046			0.9028
EUR/USD		1.3668			1.3722
EUR/CAD		1.5118			1.52
STG/CAD		1.8324			1.84
AUD/CAD		0.9667			0.9635
CAD/JPY		92.93			92.52
CAD/CHF		0.81			0.8057
CAD/HKD		7.0021			7.024
CAD/CNY		5.4681			5.4588
CAD/MXN		12.1155			12.3603
Commodities
Gold		$1,263.00			$1,270.00
OIL		$96.74			$96.95
US DOLLAR INDEX
P.CLOSE		80.5			80.62
OPEN		80.5			80.25
US 10YR YIELD		2.75%			2.71%