GFX Monring FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0850-1.0910

Today's expected range for the Canadian Dollar against the Euro is 1.4710-1.4770

Today's expected range for the Canadian Dollar against Sterling is 1.8440-1.8500

The US Dollar is weaker this morning against the Pound and Euro as Sterling has traded above the 1.7000 level for the first time in 20 months. The Pound continues to gain strength as the expectation builds for an earlier than expected interest rate hike. In Europe the Euro-Zone CPI showed inflation was in line with expectation at 0.5% in May so the low level of inflation is still a concern for the European Central Bank.

The price of a barrel of oil continues to rise this morning as the US announced that they have moved an air carrier group into the Persian Gulf to begin air strikes on the Islamist terrorists who have destabilized an already unstable region. A prolonged bout of high oil prices may derail some of the Central Bank’s plans to raise interest rates over the coming weeks.

‎The Canadian Dollar is weaker against the US Dollar as the price if oil is not helping the Loonie at the moment, the Loonie also lose a little ground to the Euro and Sterling overnight as the jump in those currency pairs pushed the Loonie lower. Given the current rates I think it is prudent for Euro buyers to look at locking in some of their Euro purchases going out a couple of months, Sterling buyers need to be ready with some orders to take advantage of any pullback, the prognosis for the Pound is to continue to gain strength.

This week the Northern Gateway Pipeline will be front and Centre in Canadian politics as the government report on the pipeline is due to be released, it will indicate if the proposed route can go ahead. ‎A defeat of the pipeline will have long-term effects on the Canadian economy and could have a short-term effect on the Loonie.

Up this week the big news is the US Federal reserve reporting on interest rates on Wednesday, up today we do have some secondary US and Canadian data so we could see some activity this morning.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0867			1.0856
CAD/USD		0.9202			0.9211
EUR/USD		1.3541			1.3564
EUR/CAD		1.4717			1.4729
STG/CAD		1.8433			1.8415
AUD/CAD		1.0197			1.0186
CAD/JPY		93.7			93.89
CAD/CHF		0.827			0.8259
CAD/HKD		7.1118			7.1121
CAD/CNY		5.7262			5.7179
CAD/MXN		12.02			12.0188
Commodities
Gold		$1,280.00			$1,274.00
OIL		$107.00			$107.08
US DOLLAR INDEX
P.CLOSE		80.65			80.56
OPEN		80.6			80.52
US 10YR YIELD		2.58%			2.59%