GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1360-1.1430

Today’s expected range for the Canadian Dollar against the Euro is 1.4220-1.4290

Today’s expected range for the Canadian Dollar against Sterling is 1.7890-1.7960

The US Dollar is stronger as global markets have picked up on the news that there would be no global cuts to oil production by OPEC countries, the biggest overnight boost for the Greenback has of course been against the commodity currencies especially the Canadian Dollar. The low that we saw for the price of oil after the OPEC announcement was $67.75, it is back trading at $69.00 this morning and it should remain very volatile, we have not seen these prices since 2010.

A couple of facts that I learned this morning, for the Canadian economy every 10% drop in the price of oil reflects in a 0.25% drop in our GDP, if you take oil dropping from $85 about a month ago and today it is at $69 that would represent an almost 0.5% hit to our economy. I heard a CBC report this morning that the Province of Newfoundland and Labrador gets a third of its revenue from offshore oil taxes, this year they budgeted $105 for a barrel of oil, they are now looking at a deficit of $1.0B which is massive for a small province. In Europe the central bank has to be worried, deflation was already a concern and now a big drop in oil prices will put further pressure on dropping domestic prices, here at home I think the Feds were budgeting $85 a barrel for their surplus next year, I think the bubble has burst on that one. I am guessing that OPEC understood all of this and wanted to put pressure on oil to get a lot of marginal producers out of the way.

As mention the Canadian Dollar has really weakened off against all currencies and the short-term prognosis does not look good, oil will stabilize over the coming days but the Loonie should remain under pressure, it has now broken out of its recent range and USD.CAD will settle in at higher rates for the rest of the year.

Up today we do get the Canadian GDP report for the third quarter and the month of September, year-over-year we are expecting a growth rate of 2.2% which is unchanged from last month,  currency markets remain thin as half off all currency traders in the US are out getting deals on Black Friday. Only a very strong report for Canada will stop the onslaught of the Loonie.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.138			1.1251
CAD/USD		0.8787			0.8888
EUR/USD		1.2473			1.2482
EUR/CAD		1.4197			1.4048
STG/CAD		1.7865			1.7742
AUD/CAD		0.9696			0.9145
CAD/JPY		103.87			104.34
CAD/CHF		0.8461			0.8554
CAD/HKD		6.7909			6.8682
CAD/CNY		5.3974			5.4541
CAD/MXN		12.1472			12.2051
Commodities
Gold		$1,182.00			$1,196.00
OIL		$68.96			$72.16
US DOLLAR INDEX
P.CLOSE		87.94			87.64
OPEN		88.06			87.79
US 10YR YIELD		2.20%			2.24%

 

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1250-1.1300

Today’s expected range for the Canadian Dollar against the Euro is 1.4050-1.4100

Today’s expected range for the Canadian Dollar against Sterling is 1.7750-1.7800

My apologies for the late arrival of the commentary the past couple of days, we are having some issues with the email server I use.

The US Dollar is marginally stronger this morning in very subdued market trading as the US is closed for the Thanksgiving holiday. The only news of note overnight was that in the face of a report that showed industrial company profits fell the most in two years China has taken further steps to loosen monetary policy to try and keep their growth levels at very high rates. In Germany the Euro received some good news as the German unemployment rate fell pushing to  a record low rate of 6.6% which is near full employment, now if only the rest of Europe could get close to that number.

Nothing of note for the Canadian Dollar last night, it continue to range trade in the 1.1250 to 1.1350 range, it was a little weaker last night with the overall stronger Greenback but nothing of significance.  With no Canadian data today and the US market closed the only wild card for the currency markets is today’s OPEC meeting and all signs are pointing to no drop in oil production which should lead to a further decline in the price of oil and a subsequent drop in all commodity currencies.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1251			1.1271
CAD/USD		0.8888			0.8873
EUR/USD		1.2482			1.2453
EUR/CAD		1.4048			1.4037
STG/CAD		1.7742			1.7747
AUD/CAD		0.9145			0.9583
CAD/JPY		104.34			104.64
CAD/CHF		0.8554			0.8565
CAD/HKD		6.8682			6.858
CAD/CNY		5.4541			5.4458
CAD/MXN		12.2051			12.1812
Commodities
Gold		$1,196.00			$1,197.00
OIL		$72.16			$73.93
US DOLLAR INDEX
P.CLOSE		87.64			87.91
OPEN		87.79			87.95
US 10YR YIELD		2.24%			2.26%

 

 

 

 

GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1230-1.1300

Today’s expected range for the Canadian Dollar against the Euro is 1.4040-1.4100

Today’s expected range for the Canadian Dollar against Sterling is 1.7770-1.7850

The UIS Dollar is for the most part unchanged this morning, the big mover was Sterling that jumped against the Greenback as UK growth numbers came in a little bit better than expected, the market was expecting a decline in growth and it came in flat so I guess you can say that is a positive number but it is not a number that will give the Bank of England any confidence to raise interest rates. In Europe an ECB official stated that the Central Bank could consider quantative easing measures if historically low interest rates do not stimulate the economy, the Euro did not really react all the much on this statement as it was just stating the obvious. I read yesterday that Deutsche Bank in Germany is calling for a 1.1500 EURO.USD rate next year, the Euro should continue to trade with a weak bias.

The Canadian Dollar had another range trading night, I think it has been a few weeks now that we have been in this 1.1250 to 1.1350 trading range with no sign of it breaking out on either side. I read a Bloomberg article this morning that said any major cuts in oil production by OPEC is unlikely so the Loonie may not get a boost after Thursday’s meeting, if the price of a barrel of oil drops below $70 then we could see the Loonie lose more ground against the Greenback.

Up today we have a slew of US Data ahead of the Thanksgiving holiday tomorrow, we should have some volatility this morning and then the market will slow down as the US closes. Remember that the wire system is closed tomorrow so if you need to do something get your orders in today.

Have a great day and to all our American Readers a very safe and happy Thanksgiving holiday.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1271			1.1285
CAD/USD		0.8873			0.8861
EUR/USD		1.2453			1.2431
EUR/CAD		1.4037			1.4029
STG/CAD		1.7747			1.7671
AUD/CAD		0.9583			0.9633
CAD/JPY		104.64			104.59
CAD/CHF		0.8565			0.8568
CAD/HKD		6.858			6.852
CAD/CNY		5.4458			5.436
CAD/MXN		12.1812			12.1345
Commodities
Gold		$1,197.00			$1,200.00
OIL		$73.93			$76.09
US DOLLAR INDEX
P.CLOSE		87.91			88.1
OPEN		87.95			88.18
US 10YR YIELD		2.26%			2.29%

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1250-1.1320

Today’s expected range for the Canadian Dollar against the Euro is 1.4020-1.4100

Today’s expected range for the Canadian Dollar against Sterling is 1.7680-1.7760

The US Dollar is unchanged for the most part this morning as currency markets get ready for the US GDP report this morning. Once again the commodity currencies led the market as Aussie, Kiwi and Canada all traded weaker at one point last night, they are all reacting to falling oil and commodity prices ahead of the OPEC meeting on Thursday. The Japanese Yen did recover a little last night as currency traders took some profit on their short Yen positions ahead of the GDP report.

Over the last few months I have l talked about the strong US Dollar trend that continues to remain in place, this morning I read a Bloomberg article that highlights that trend. In a recently published report by the Chicago Mercantile Exchange, hedge funds and other large currency speculators have pushed the long US Dollar speculative positions to a record $48 Billion in size, all these funds are betting that the US Dollar will continue to get stronger over the medium term. Until you see a large turnaround in this position the Greenback will still continue to rally throughout the new year.

The Canadian Dollar traded weaker throughout the night alongside other commodity currencies before recovering early this morning, again we see another Canadian Dollar rally sniffed out and the Loonie give back strength that it had gained after Friday’s inflation numbers. If USD.CAD does not break higher this morning after the US GDP report then we could see another rally for the Loonie be created.

There is an article in the Globe and Mail this morning that quotes the OECD (Organization for Economic Co-operation and Development) as saying Canada will increase interest rates next spring, and then increase them steadily thereafter. This view is well ahead of want bank economists are predicting and even what the Bank of Canada is currently saying, if this view is correct it should be very positive for the Canadian Dollar over the medium term, again another positive factor that seems to be accumulating in favour of the Loonie. I will keep an eye on inflation over the next few months to get a sense of what the Bank will do.

For the US GDP report for the 3^rd quarter we are expecting an annualized growth rate of 3.4% rate which is down slightly from the 3.5% last quarter, so a slight downward revision on the economy. In addition to the GDP report we are getting the Canadian Retails Sales report for September and a slew of US secondary data including Consumer Confidence for November, we should be in for a busy morning session.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1285			1.124
CAD/USD		0.8861			0.8897
EUR/USD		1.2431			1.2408
EUR/CAD		1.4029			1.3949
STG/CAD		1.7671			1.7617
AUD/CAD		0.9633			0.9708
CAD/JPY		104.59			105.17
CAD/CHF		0.8568			0.8619
CAD/HKD		6.852			6.8784
CAD/CNY		5.436			5.4624
CAD/MXN		12.1345			12.1592
Commodities
Gold		$1,200.00			$1,195.00
OIL		$76.09			$76.24
US DOLLAR INDEX
P.CLOSE		88.1			88.3
OPEN		88.18			88.23
US 10YR YIELD		2.29%			2.33%

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1210-1.1270

Today’s expected range for the Canadian Dollar against the Euro is 1.3950-1.4000

Today’ s expected range for the Canadian Dollar against Sterling is 1.7640-1.7700

The US Dollar is mixed this morning in a quiet overnight trading session, the Greenback is marginally weaker against the Euro and Sterling and marginally stronger against the Yen and Commodity currencies. In Europe, the Euro is stronger to start the week as the common currency received a boost from a report that showed business confidence rose for the first time in seven months across the region, in Japan the Yen continues to trade weaker on the expectation of further Government stimulus after the election. In the UK the Pound traded weaker for most of the morning session before rebounding on expectation of poor economic data this week which will underpin the BOE’s low interest rate policy.

The Loonie is marginally weaker this morning as it continues to hold onto the strength it picked up from the stronger than expected inflation report on Friday. IF the recent trading pattern holds then I would expected USD.CAD to move back above 1.1300 at some point but I am getting a sense that the Loonie might be able to extend this push and USD.CAD might have some room to run lower. I have not said this much lately but US Dollar sellers might want to think about putting some more forward contracts on to protect themselves in case the Loonie does go on a bit or a run.

The US markets will be closed this Thursday but of interesting note is that OPEC has a meeting planned to discuss the supply of oil and if they announce a drastic cut in the supply we should see the oil price jump which could give the Loonie a big push stronger, with the market being fairly illiquid that day we could see some enhanced volatility.

With the market closed on Thursday the US is cramming in their last releases of the month on Tuesday and Wednesday highlighted by the US GDP report tomorrow, Canada has a light week with just our GDP report on Friday being the only report of major significance. The fact that the US market will still be at half-staff on Friday could bring some enhanced volatility for the Loonie if we get a surprising number. With the US Holiday on Thursday remember that the Fed wire system will be closed so make sure you get your orders in early this week if you need to send a wire.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.124			1.1277
CAD/USD		0.8897			0.8868
EUR/USD		1.2408			1.2432
EUR/CAD		1.3949			1.4023
STG/CAD		1.7617			1.767
AUD/CAD		0.9708			0.9818
CAD/JPY		105.17			104.32
CAD/CHF		0.8619			0.8571
CAD/HKD		6.8784			6.8564
CAD/CNY		5.4624			5.4298
CAD/MXN		12.1592			12.0888
Commodities
Gold		$1,200.00			$1,195.00
OIL		$76.68			$77.23
US DOLLAR INDEX
P.CLOSE		88.3			87.62
OPEN		88.23			88.17
US 10YR YIELD		2.33%			2.35%