GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2475-1.2575

Today’s expected range for the Canadian Dollar against the Euro is 1.3960-1.4060

Today’s expected range for the Canadian Dollar against Sterling is 1.9210-1.9310

The US Dollar is marginally stronger this morning against the majors, the Greenback continues to benefit from yesterday’s stronger than expected manufacturing data. EURO.USD is looking to set new multi-year lows as the rate has hit 1.1180 in overnight trading,  Euro markets remain nervous as a they await the ECB interest rate announcement on Thursday. Sterling is also weaker this morning despite a slightly better than expected construction report.

The Canadian Dollar is unchanged from our Toronto close on  Monday, I get a sense that Canadian Dollar traders are squaring up their positions ahead of the Bank of Canada announcement tomorrow. Given the lack of guidance that the bank is providing and the surprise interest rate cut at the last meeting traders are getting nervous on what the Bank will do next. I look for USD.CAD to range trade ahead of the GDP report later this morning.

 

Up today we do get as mentioned the Canadian GDP report for both the month of December and the 4^th quarter. On an annualized better we are expecting the 4^th quarter reading to show a growth rate of 2.0% which would be down from the 3^rd quarter of 2.8%. On a monthly basis we are expecting GDP to have grown in December by 0.3% up from the negative reading in November of -0.2%. I think we will see some volatility around this release and given the poor Retail Sales report from December my expectation would be for a disappointing number which should push USD.CAD higher.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Monday
USD/CAD		1.2525			1.25			1.2534
CAD/USD		0.7985			0.8			0.7978
EUR/USD		1.1164			1.1228			1.1182
EUR/CAD		1.3982			1.4041			1.4021
STG/CAD		1.9248			1.9265			1.9264
AUD/CAD		0.9775			0.9736			0.9739
CAD/JPY		95.66			95.75			95.79
CAD/CHF		0.7669			0.7644			0.7644
CAD/HKD		6.17			6.1781			6.1624
CAD/CNY		5.0085			5.0163			5.0023
CAD/MXN		12.0355			12.0059			11.996
Commodities
Gold		$1,207			$1,214			$1,205
OIL		$50.29			$48.89			$49.82
US DOLLAR INDEX
OPEN		95.53			95.18			95.51
US 10YR YIELD		2.10%			2.00%			2.08%