GFX Morning Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0900-1.0960

Today's expected range for the Canadian Dollar against the Euro is 1.4820-1.4880

Today's expected range for the Canadian Dollar against Sterling is 1.8300-1.8360

The US Dollar is for the most part unchanged this morning as the markets got ready for this morning's ECB and Bank of England interest policy announcements.

As we have been reporting over the past month the European Central Bank is expected to announce a massive stimulus program to kick-start the EU economy, it is expected that they will drop their key lending rate to 0.1% from 0.25%, take the interest rate held on deposits at the ECB to    negative -0.25% and start a bond buying program to flood the financial markets‎ with cheap money. As I am writing the ECB announcement has hit the market, they have indeed lowered their key lending rate to 0.10%, they have reduced the deposit rate to -0.1% (banks will pay them to hold their money at the Central bank) and they have reduced their marginal lending facility to .60% from .75%. So far there is no mention of a bond buying program but that may be announced by Governor Draghi at his press conference at 08:30 or he may hint that further stimulus measures will be introduced next month. Shortly after this announcement the Euro did drop a bit against the US Dollar and it does look to be under pressure for the next little while.

The Bank of England as expected did not change its interest rate or stimulus program. The minutes of this meeting will be released in a couple of weeks which many economists will be looking to see if the Bank of England will start to pull back on their stimulus program. Sterling also dropped a little this morning against the US after the ECB announcement.

After a quick weakening yesterday from the Bank of Canada interest rate statement, USD.CAD settled down to a tight overnight trading range, as I mentioned yesterday the Bank of Canada seems to want to help the Loonie trade weaker in an effort to boost the export market. USD.CAD did not have much reaction to the ECB announcement but with the weak Euro, EURO.CAD is moving lower.

In addition to the ECB announcement and press Conference at 08:30 this morning we do get some secondary data from Canada’s housing market today. For the most part North American will have a quiet trading day as we get set up for the Canadian and US employment reports due out tomorrow morning. I look for USD.CAD to trade slightly higher throughout the morning.

‎Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0937			1.0928
CAD/USD		0.9143			0.915
EUR/USD		1.3611			1.3611
EUR/CAD		1.4891			1.4874
STG/CAD		1.8343			1.8281
AUD/CAD		1.016			1.013
CAD/JPY		93.68			93.95
CAD/CHF		0.8185			0.8204
CAD/HKD		7.0663			7.0744
CAD/CNY		5.716			5.7165
CAD/MXN		11.8348			11.8595
Commodities
Gold		$1,245.00			$1,245.00
OIL		$102.33			$103.33
US DOLLAR INDEX
P.CLOSE		80.67			80.55
OPEN		80.58			80.62
US 10YR YIELD		2.58%			2.58%