GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0860-1.0720

Today's expected range‎ for the Canadian Dollar against the Euro is 1.4900-1.4960

Today's expected range for the Canadian Dollar against Sterling is 1.8310-1.8370

‎The US Dollar is marginally weaker this morning but for the most part unchanged from our Friday close. Overnight Sterling was stronger at one point as the April inflation data showed that inflation jumped for the first time in almost a year. Inflation grew in April at an annualized rate of 1.8% up from the March rate of 1.6%, the UK continues to outperform the rest of Europe but this inflation report may force Carney’s hand and increase interest rates to cool the housing market long before he really wants to. In other news overnight, the Aussie Dollar was lower as the Government there indicated that interest rates will remain low for a prolonged period of time, an economy and current situation that is very similar in nature to Canada’s.

The Euro continues to trade under pressure as global currency speculators increase their short Euro bets. I would guess that global investors feel there is now a 100% certainty that the European Central Bank will introduce some stimulus measures at their meeting next month. Some of the options available to the central bank include lowering the key interest rate to 0.10% from 0.25%, dropping the deposit rate to -0.10% ( it would cost you to hold deposits rather than receive interest) or start buying back EU bonds. Either way the Euro should continue to trade under pressure for the next few weeks.

The Canadian Dollar traded weaker throughout the holiday weekend but continues to trade within recent ranges and does not yet look set for a breakout in either direction. With only Canadian Wholesale trade data due out today,  I am not expecting much to happen. USD.CAD may test back above 1.0900 at some point but again I would not expect much of break higher this morning.

Have a great week.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0884			1.0876
CAD/USD		0.9187			0.9195
EUR/USD		1.3687			1.3688
EUR/CAD		1.4909			1.4889
STG/CAD		1.8314			1.8262
AUD/CAD		1.0088			1.0181
CAD/JPY		93.05			93.22
CAD/CHF		0.8191			0.8197
CAD/HKD		7.1165			7.1222
CAD/CNY		5.7277			5.7292
CAD/MXN		11.894			11.9449
Commodities
Gold		$1,293.00			$1,295.00
OIL		$102.72			$101.71
US DOLLAR INDEX
P.CLOSE		80.12			80.03
OPEN		80.04			80.09
US 10YR YIELD		2.53%			2.50%