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%