GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0775-1.0850

Today’s expected range for the Canadian Dollar against the Euro is 1.4900-1.4975

Today’s expected range for the Canadian Dollar against Sterling is 1.8240-1.8300

The US Dollar is stronger again this morning as the rout of the Euro continues, just before yesterday’s press conference where ECB Governor Draghi mentioned that the Central Bank was ready to provide stimulus next month to the EU economy EURO.USD was trading at 1.3940, this morning EURO.USD is trading at 1.3790, a two hundred point drop in less than 24 hours, who said that there was no volatility in the FX markets anymore? EURO.CAD has also had a big rally as it is now trading at 1.4930 in the interbank market, that is quite a drop for a currency pair that has been relatively stable and presents great value for Euro buyers.

In other news overnight Sterling is higher this morning as once again higher on better than expected manufacturing data, we are certainly seeing a real divergence of two economies at the moment, the UK is set to increase interest rates and Europe needs to cut interest rates and add stimulus to stop deflation in their economy. I think Europe is in real trouble at the moment and the kick the can down the road plan of a few years back is coming home to roost.

With the dramatic weakness in the Euro the Canadian Dollar has been able to extend some gains against the US Dollar over the past 24 hours and it does look to extend those gains at the moment. Everything will depend on the Canadian Employment report for April due for release at 08:30 this morning. We are expecting the economy to have created 16K new jobs last month, if we get a number in the range of 30k new jobs then I think we will see USD.CAD drop below 1.0800, if the number is considerably weaker than expectation then I think you will see USD.CAD test back up to 1.0900 at some point.

If we get any dramatic movement I will send out a currency alert. Have a great weekend

Mike

GFX Morning Currency Rates
Friday May 09, 2014
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0819			1.0884
CAD/USD		0.9243			0.9188
EUR/USD		1.381			1.3941
EUR/CAD		1.4944			1.5177
STG/CAD		1.8289			1.8465
AUD/CAD		1.0138			1.0213
CAD/JPY		93.94			93.46
CAD/CHF		0.8154			0.8023
CAD/HKD		7.159			7.1154
CAD/CNY		5.7529			5.7188
CAD/MXN		12.0033			11.9239
Commodities
Gold		$1,289.00			$1,292.00
OIL		$100.71			$100.53
US DOLLAR INDEX
P.CLOSE		79.37			79.23
OPEN		79.57			79.08
US 10YR YIELD		2.61%			2.63%