GFX Morninig FX Commentary

Good Morning,

Today’s suggested range for the Canadian dollar against the US Dollar is 1.1100 – 1.1200.

Today’s suggested range for the Canadian dollar against the Euro is 1.5250 – 1.5350

Today’s suggested range for the Canadian dollar against Sterling is 1.8550 – 1.8650

The USD has firmed against the broader market and surged against the Canadian dollar. In the Asian session the US Dollar advance was mostly against the Japanese Yen amid speculation the U.S. Fed will continue tapering stimulus while the Bank of Japan maintains its bond purchase program.

In Europe the British Pound held steady following the release of  U.K. retail sales for January down 1.5% m/m and up 4.3% y/y. The European single currency was confined to narrow ranges with no Euro-zone economic releases due out today.

The USD/CAD surged overnight gaining a half cent but it’s not only demand for US dollars that is weakening the currency, the pressure is coming from the broader market. The CAD is being shorted against most major currencies with GBP/CAD breaking above 1.8600, EUR/CAD above 1.5300 and even the Aussie dollar is above parity against the loonie. This is the third day in a row the CAD has been under pressure since the announcement of the large M&A deal to buy USD/CAD. The years high for USD/CAD is at 1.1224 and for further weakness going forward we would need to see two consecutive closes above this level. For today whether further weakness takes hold will depend on the important inflation data in Canada to be released at 8:30am with CPI y/y expected to rise to 1.3% from 1.2% and on a m/m basis up 0.1% last down 0.4%. Should inflation not exceed expectations the CAD will get hit again. The other economic release in Canada today is retail sales for December which will take on less importance. In the U.S. today at 10:00am we have existing home sales for January which will probably follow the trend and disappoint. Today being Friday and ahead of the weekend thinner market conditions could result in big swings.

Good luck today!

GFX Morning Currency Rates
Friday February 21, 2014
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1157			1.1067
CAD/USD		0.8963			0.9035
EUR/USD		1.3705			1.3692
EUR/CAD		1.5293			1.515
STG/CAD		1.8546			1.842
AUD/CAD		1.0035			0.9943
CAD/JPY		91.79			92.13
CAD/CHF		0.7975			0.8051
CAD/HKD		6.9292			6.9893
CAD/CNY		5.4605			5.4964
CAD/MXN		11.916			12.0477
Commodities
Gold		$1,321.00			$1,313.00
OIL		$102.42			$103.21
US DOLLAR INDEX
P.CLOSE		80.29			80.2
OPEN		80.36			80.3
US 10YR YIELD		2.76%			2.72%