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%