GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2440-1.2520

Today’s expected range for the Canadian Dollar against the Euro is 1.4000-1.4070

Today’s expected range for the Canadian Dollar against Sterling is 1.9270-1.9340

The US Dollar is Dollar is marginally weaker this morning as the currency markets await the US GDP report for the 4^th Quarter of last year. The US CPI and Jobless claims report disappointed the market yesterday, I think the market will now be looking at this GDP report with the expectation that it too might disappoint the market, if it does we might see the Dollar get hit as it may push out the Federal Reserve’s plan to increase interest rates.

The Euro is slightly higher this morning as some positive data out of France helped push the Euro higher, I would still say the sentiment is for a weaker Euro over the short-term as the Greek situation is still to unfold in the coming months.

The Canadian Dollar is a little bit stronger this morning but continues to trade in and around the 1.2500 level, the Loonie did pick up some gains yesterday both against the Euro and Sterling as it was able to benefit from weakness in both of those currencies. Sterling buyers may want to look at these levels as good buying opportunities, I would still think the overall strength in Sterling and the weakness in the Canada will push the rate to 2.0000 at some point in the next few  months.

In addition to the US GDP report ( we are expecting an increase of 2.1%, last 2.6% y-o-y) we are expecting some secondary US data including Consumer Confidence and the Chicago PMI. It will be the GDP report that traders will be focused on and if we get a surprise we could be in for a very busy morning.

I was reading this morning that the temperature might reach 0 degrees next week, It has been so long since we have been that warm I might just have the pool opened at the Smith household.

Have a great weekend.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm Thursday close
USD/CAD		1.2474			1.2443			1.2523
CAD/USD		0.8016			0.8036			0.7985
EUR/USD		1.1223			1.1352			1.1194
EUR/CAD		1.4004			1.4128			1.4018
STG/CAD		1.9244			1.9311			1.9295
AUD/CAD		0.9765			0.9829			0.9759
CAD/JPY		95.59			95.34			95.36
CAD/CHF		0.7609			0.7601			0.7608
CAD/HKD		6.1932			6.2057			6.1703
CAD/CNY		5.0235			5.025			4.995
CAD/MXN		12.06						12.0046
Commodities
Gold		$1,207			$1,216			$1,208
OIL		$48.97			$50.35			$48.95
US DOLLAR INDEX
OPEN		95.1			94.26			95.35
US 10YR YIELD		2.04%			1.94%			2.03%

 

 

 

 

GFX Mornng FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2400-1.2470

Today’s expected range for the Canadian Dollar against the Euro is 1.4120-1.4190

Today’s expected range for the Canadian Dollar against Sterling is 1.9300-1.9370

The US Dollar for the most part is unchanged this morning as the overseas markets digest Fed Chairperson Yellen comments and get set for US CPI data. The Dollar remains under a little pressure as Yellen stated that it will be unlikely that there will be an interest rate increase in the next couple of Fed meetings. The Euro is unchanged from our close yesterday in spite of an improving employment picture and better consumer confidence in Germany.

The Canadian Dollar could not extend it gains which it experienced when Poloz was talking yesterday, USD.CAD snapped back higher last night. Once again the Loonie remains under pressure and even positive news cannot start it on a roll.

In addition to the US CPI today we also get the Canadian CPI where we are expecting an increase of 0.8% which would bring a year-over-year rate of 2.2% (up from 2.1%). Inflation at the moment does not seem to be a major concern of the Bank of Canada so I am not looking for a great deal of volatility from the this number.

Have a great day

Mike

 

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2380-1.2450

Today’s expected range for the Canadian Dollar against the Euro is 1.4100-1.4170

Today’s expected range for the Canadian Dollar against Sterling is 1.9240-1.9310

The US Dollar is for the most part unchanged against the majors but continues to give up ground to the Canadian Dollar after the comments yesterday from Yellen and Poloz. In her address to the Senate, Yellen once again said the Fed is not in a hurry to increase interest rates and she once again indicated that any rate hike this year will come in the 2^nd half of the year, the Fed will give lots of guidance as to when they are going to increase interest rates beforehand. Yellen Said “unlikely that economic conditions would warrant an interest rate increase for at least the next couple of FOMC meetings”. The equity markets loved this news as the Dow Jones reached a new record level, stocks should stay strong for a few months yet. The US Dollar traded marginally lower on the report, the Fed’s position may start to stem the rapid appreciation of the Greenback for the moment.

In Europe, the Euro was not really able to make significant gains as both the IMF and European Central bank said Greece’s reform plans were not detailed enough and Athens will need to do more to secure further bailout funds. It looks once again that all Europe has done is kick the can down the road and not really solved any problems.

The Canadian Dollar continues to benefit from Bank of Canada Governor’s speech yesterday. Highlights of that speech include the effects of a plunge in oil prices on the economy remains uncertain, the cut in interest rates buys the Bank time to see what that effect will be,  the drop in oil will mean lower Canadian income and the debt-to –income ratio of Canadian households will increase. The Loonie is rallying as what markets thought was a 100% chance of a further rate cut in March is now considerably less, most economists think they will wait until April so the Bank can have a look at the next Monetary Policy Report and garner more information on the economy. If this is going to be a sustained rally for the Loonie we need to see a clean break of 1.2300 and we are a long way from that at the moment.

This morning it was RBC’s turn to report 1^st quarter income and they hit a new record of $2.4B, so much for Canadian banks falling on hard times. The majority of this profit came from Canadian banking operations, if you are an RBC customer take comfort in that you are supporting this fine institution with high banking fees.

Up today Canadian Dollar trading will focus on the oil inventory numbers out of the US, right now the oil price cannot get back above $50, if the oil price drops further today we will see the Loonie stem its advances.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm Tuesday close
USD/CAD		1.2422			1.2632			1.2484
CAD/USD		0.805			0.7916			0.801
EUR/USD		1.1341			1.1319			1.1341
EUR/CAD		1.4089			1.4301			1.416
STG/CAD		1.9255			1.9508			1.4304
AUD/CAD		0.9785			0.9796			0.9777
CAD/JPY		95.59			94.59			95.2
CAD/CHF		0.7643			0.7512			0.7609
CAD/HKD		6.22			6.1172			6.1896
CAD/CNY		5.0361			4.9512			5.0087
CAD/MXN		12.0314			11.9839			11.9664
Commodities
Gold		$1,208			$1,198			$1,200
OIL		$49.48			$49.75			$49.07
US DOLLAR INDEX
OPEN		94.37			95.82			94.51
US 10YR YIELD		1.97%			2.09%			1.99%

 

 

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2600-1.2670

Today’s expected range for the Canadian Dollar against the Euro is 1.4300-1.4370

Today’s expected range for the Canadian Dollar against Sterling is 1.9490-1.9560

The US Dollar is marginally stronger this morning as the markets get set for Federal Reserve Chairperson Janet Yellen’s testimony before the Senate, market watchers will be looking for any hints on the next interest rate hike and her overall view on the US economy. Last week’s FOMC minutes were more dovish than expected so there may be many questions asked of Yellen in the face of a possible slowdown in the US economy.

Overnight the Euro trades slightly weaker, Greece was delayed in getting the plan for their new reforms over to the EU which must now review these reforms to make sure Greece qualifies for the 4-month loan extension they were looking for. In the UK Sterling has remained supported overnight as a Bank of England official stated that the Bank could raise interest rates sooner than expected, certainly Sterling has been on a great run lately and I think it will be only a matter of time before GBP.CAD hits the 2.0000 level.

The Canadian Dollar continues to lose ground to the Greenback as the brutal Retail Sales report and an expected interest rate cut in March continues to weigh on the Loonie, it is not a pretty picture for the Loonie at the moment. That quick dip in USD.CAD we had yesterday on the Nigerian Oil Minister comments about OPEC having a meeting on oil production were very short-lived but just show how sensitive the currency market is to any comments on the oil market.

Up today we get s set of US secondary data but the markets will focus on what Yellen has to say. In Canada, Bank of Canada Governor Stephen Poloz will be speaking at the University of Western Ontario and the Canadian markets will be looking for any hints of more rate cuts to come. With two central bankers speaking today volatility will be at a premium.

We are now in bank earnings season and the first to report this morning was BMO which reported a 5% drop in profits, with the drop in the price of oil and the rising prospects of a housing bubble out West the banks are expected to report reduced earnings so brace your business for fee increases. Long time readers will now that I have always maintained that they only way to protect your business from the exorbitant bank fees that we as business owners pay is to own the stock and use the dividends to offset the high fees.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Monday
USD/CAD		1.2632			1.2594			1.2575
CAD/USD		0.7916			0.794			0.7953
EUR/USD		1.1319			1.1309			1.133
EUR/CAD		1.4301			1.4243			1.4249
STG/CAD		1.9508			1.9342			1.9439
AUD/CAD		0.9796			0.9814			0.981
CAD/JPY		94.59			94.5			94.65
CAD/CHF		0.7512			0.7535			0.7555
CAD/HKD		6.1172			6.1351			6.1351
CAD/CNY		4.9512			4.9655			4.9733
CAD/MXN		11.9839			12.0019			12.0019
Commodities
Gold		$1,198			$1,193			$1,193
OIL		$49.75			$49.63			$49.63
US DOLLAR INDEX
OPEN		95.82			94.89			94.66
US 10YR YIELD		2.09%			2.13%			2.07%

 

 

 

 

GFX Morning FX Commentary

Good Morning

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2570-1.2640

Today’s expected range for the Canadian Dollar against the Euro is 1.4260-1.4330

Today’s expected range for the Canadian Dollar against Sterling is 1.9370-1.9440

The US Dollar is stronger hits morning as the markets digest the news that Greece and the EU have reached a deal to cover the country for the next 4 months. The deal is contingent on the Greek parliament agreeing to certain reforms, basically the same type of reforms that the original agreement was based on. The new Greek Government is saying they “won the battle” but the war is still ongoing. This is surely a case of the Syrzia party pulling a fast one, making promises to the Greek people to end austerity and in looking at it they have done nothing  but make a few cosmetic changes.

The Canadian Dollar continues to get hammered on the very poor Retail Sales report on Friday, what economy loses 2% in Retail Sales in December? No wonder we are seeing large retailers in the Canadian economy struggle. USD.CAD had a look above 1.2600 last night but fell back in early morning trading, the Loonie also suffered from the oil price falling below the $50 a barrel price during the night. It certainly looks now that USD.CAD is set for a move higher.

Up this week have inflation data out of the US and Canada on Thursday and the week will be highlighted by the US GDP report on Friday, that could give us a clue on what will happen with US interest rates in the coming months. Also this week we get a slew of Central bankers making speeches highlighted for us by Stephen Poloz, it certainly looks like volatility will still be around for the while.

Have a great seek and try and stay warm.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Friday
USD/CAD		1.2594			1.2445			1.2531
CAD/USD		0.794			0.8035			0.798
EUR/USD		1.1309			1.1327			1.1309
EUR/CAD		1.4243			1.4098			1.4243
STG/CAD		1.9342			1.9116			1.9342
AUD/CAD		0.9814			0.9755			0.9814
CAD/JPY		94.5			95.41			94.5
CAD/CHF		0.7535			0.7642			0.7535
CAD/HKD		6.1351			6.2108			6.1351
CAD/CNY		4.9655			5.023			4.9655
CAD/MXN		12.0019			12.0596			12.0019
Commodities
Gold		$1,193			$1,203			$1,205
OIL		$49.63			$51.60			$50.45
US DOLLAR INDEX
OPEN		94.89			94.68			94.45
US 10YR YIELD		2.13%			2.11%			2.11%