GFX Currency Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2420-1.2490

Today’s expected range for the Canadian Dollar against the Euro is 1.4080-1.4250

Today’s expected range for the Canadian Dollar against Sterling is 1.9140-1.9210

The US Dollar is stronger this morning with the biggest move coming against the British Pound. In the UK this morning a poorer than expected Retail Sales report put pressure on GBP.USD as the rate fell from 1.5430 to 1.5350. With the recent spate of positive data out of the UK I think this negative report caught the market a little off guard and the move lower for Sterling became a bit bigger than it normally would have been on such a number.

The Euro is a little lower this morning as last minute negotiations with Greece and the EU continue, we should know more about this situation later today.

The Canadian Dollar has rallied overnight and once again the inter-bank rate seems to be stick in this 1.2450-1.2550 trading range, I think this is happening because oil has stabilized into a range as well and that is calming down volatility. If the Loonie is to make a sustained move higher we need to see a clean break of 1.2400 for the Loonie to hold any gains over the medium term, I think the risk of a move to 1.3000 is greater than any move back towards 1.2000 at the moment but as we all know that can change in the blink of an eye.

Up today we get the Canadian Retail Sales report for December and much like the UK earlier this morning a surprise number will move the market. We are expecting an a drop of 0.4% (last month was an increase of 0.2%) which if true is yet another example of the slowdown in the Canadian economy, a negative number for the busy Christmas shopping season I would think will be doubly bad for the Canadian economy. Not sure how we can see a sustained Canadian Dollar rally when we see poor economic results and with a Bank of Canada that will more than likely cut interest rates again soon.

Have a great weekend and stay warm.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm Thursday close
USD/CAD		1.2445			1.2477			1.2494
CAD/USD		0.8035			0.8014			0.8003
EUR/USD		1.1327			1.1393			1.1359
EUR/CAD		1.4098			1.4218			1.4196
STG/CAD		1.9116			1.9286			1.9257
AUD/CAD		0.9755			0.9721			0.9731
CAD/JPY		95.41			95.34			95.19
CAD/CHF		0.7642			0.7586			0.7597
CAD/HKD		6.2108			6.1938			6.185
CAD/CNY		5.023			5.0131			5.0039
CAD/MXN		12.0596			11.9662			12.0461
Commodities
Gold		$1,203			$1,217			$1,217
OIL		$51.60			$50.25			$51.89
US DOLLAR INDEX
OPEN		94.68			94.21			94.5
US 10YR YIELD		2.11%			2.07%			2.11%