GFX Morning FX Commentart

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.1020-1.1120

Today's expected range for the Canadian Dollar against the Euro is 1.5150-1.5220

Today's expected range for the Canadian Dollar against Sterling is 1.8270-1.8370

The US Dollar is weaker this morning with Sterling once again the strongest currency overnight. This morning the UK reported better than expected housing data and BOE Governor Carney poured more fuel on the fire by not ruling out earlier than expected interest rate hikes. The Japanese Yen was also higher this morning as a large sell-off in emerging market currencies led to a rush for investors to buy Yen for temporary safe keeping.

Overnight also saw a big development in the currencies of the emerging markets with Argentina and Venezuela both devaluing their currency, there was a big sell-off in the Turkish Lira and the ongoing unrest in the Ukraine is causing investors to flow out of the emerging markets and back into safe haven currencies like Yen and Swiss. At the very least these developments will take investor focus away from the weak Canadian Dollar.

The Canadian Dollar was able to garner some small gains overnight and is now 100 points stronger against the US Dollar from its weakest level after the Bank of Canada announcement. Canadian Dollar trading will today be dominated by the inflation report for December due to the fact that the Bank of Canada cited the low level of inflation as one of their biggest concerns. If the report shows inflation on the rise the Loonie should strengthen and just the opposite will happen if it falls. I will caution readers that the Loonie only really started to weaken quickly in January so it will not have any effect on this number. Just in speaking to some of my clients over the past few weeks that need to buy US Dollars, this recent weakness in the Loonie will have a dramatic effect on inflation a few months down the road.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1077			1.1155
CAD/USD		0.9028			0.8965
EUR/USD		1.3722			1.3633
EUR/CAD		1.52			1.5205
STG/CAD		1.84			1.8507
AUD/CAD		0.9635			0.9779
CAD/JPY		92.52			93.35
CAD/CHF		0.8057			0.8093
CAD/HKD		7.024			6.9312
CAD/CNY		5.4588			5.424
CAD/MXN		12.3603			11.9855
Commodities
Gold		$1,270.00			$1,248.00
OIL		$96.95			$96.84
US DOLLAR INDEX
P.CLOSE		80.62			81.16
OPEN		80.25			80.86
US 10YR YIELD		2.71%			2.83%