GFX Morning 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 1.3740-1.3830

Today’s expected range for the Canadian Dollar against Sterling is 1.8950-1.9020

The US Dollar remains supported as yesterday’s secondary data was positive in nature, the Greenback continues to make new-multi year highs against the Euro. Financial markets await the announcement this morning from the ECB on interest rates, it is expected that they will provide more information on their stimulus program that is expected to start in the next few weeks. I don’t think they will say anything today that will give the Euro any real strength, there is still a lot of uncertainty in the Euro market. The Bank of England also reported on interest rates this morning and as expected they did not make any changes, Sterling has not shown any real reaction to the announcement.

I read a very interesting article in my hometown newspaper the Hamilton Spectator yesterday and it dealt with the growing oil glut in the US. Presently the US produces and imports 1M barrels of oil a day more than it needs, some 80% of this oil surplus is stored at the large oil facility in Cushing, Oklahoma. Through independent research that facility is almost 2/3 full and running out of space to store the surplus oil rapidly. The story went on to argue that if the US runs out of storage capacity then more US producers will go offline, imports will be curtailed and the price will plummet. If this scenario unfolds as stated the price of oil would plummet the Canadian Dollar get hit in a big way, I think I will start to pay a little more attention to the oil inventory numbers every month, if they continue to escalate it could have a big impact on our currency.

The Canadian Dollar had a strong day after the Bank of Canada report yesterday, it had a rapid move of about 70 pips lower against the Greenback and has continued to slowly rally overnight, it had  a great day against the Euro and Sterling as weakness in those currencies have really helped the Loonie. EURO.CAD has not been this low since June of 2013, I think Euro buyers would be well served by looking at some forward contracts. Overall I still want to see a sustained break of 1.2300 before I can see a rally for the Loonie unfolding, at this time we are still range trading without any clear direction.

In addition to the ECB announcement due shortly we have secondary US and Canadian data. After the ECB announcement runs its course through the market, traders will start to position themselves for the US employment report due tomorrow.

Just a heads up our office will be closing at 3:00 pm tomorrow as we get ready for our move over to the AFEX Toronto office, If you need to do a wire try and get it in as early as possible so we can complete the trade.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Wednesday
USD/CAD		1.2416			1.2507			1.2414
CAD/USD		0.8025			0.7945			0.8055
EUR/USD		1.1043			1.112			1.1072
EUR/CAD		1.3714			1.3917			1.3748
STG/CAD		1.8928			1.9195			1.8943
AUD/CAD		0.9695			0.9797			0.7818
CAD/JPY		96.75			95.61			96.36
CAD/CHF		0.78			0.7688			0.7754
CAD/HKD		6.2243			6.1772			6.2236
CAD/CNY		5.0452			5.0127			5.0491
CAD/MXN		12.1684			12.0383			12.1485
Commodities
Gold		$1,200			$1,205			$1,199
OIL		$52.11			$50.79			$51.69
US DOLLAR INDEX
OPEN		96.2			95.69			95.95
US 10YR YIELD		2.13%			2.13%			2.12%