GFX Morning Commentary February 14th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9950-1.0050

Today's expected range for the Canadian Dollar against the Euro is 1.3150-1.3250

Today's expeected range for the Canadian Dollar against Sterling is 1.5680-1.5800

I have made a further refinement to the commentary as quite a few people were having trouble accessing the blog. I will email out the whole written commentary each morning and include a link to the Blog so anybody who wants to access the morning rates and the other resources can see them, I hope this works better.

The Euro had a wild ride last night as first the common currency was much weaker on the report from Moody's at 5:00 pm yesterday that they were downgrading the sovereign debt of 6 European nations and putting France, Austria and the UK on credit watch with a negative outlook. The Euro which had a good day yesterday slipped to trade to 1.3125 during the Asian sessioin. Earlier this morning, Italy held a bond auction and the event was oversubscribed with Italy paying the lowest interest rate since March of 2011. On this news the Euro jumped higher and traded back towards the 1.3200 level against the US Dollar. Once again we see the nervousness in the currency markets as it reacts to the slightest news being reported out of Europe, I think this Euro domination of the world's currency markets will continue for some time to the detriment of North America.

The Canadian Dollar had a busier night with the Moody's announcement, at first it weakened off on the downgrade and then recovered on the Italian bond auction news, each time trading in direct correlation with the Euro. Just watch the action in the Euro and you will know exactly where the Loonie will go, for the moment USD.CAD continues to trade back and forth around par and I don't see that changing anytime soon.

Have a Great Day
Mike

GFX FOREIGN EXCHANGE MORNING UPDATE

                                                                  Tuesday, February-14-12
Market Indicators                   * For current market prices please contact our currency advisors or visit our
                                                  on line site at www.gfxpartners.ca *

Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9984			0.9977
CAD/USD		1.0016			1.0023
EUR/USD		1.3202			1.3263
EUR/CAD		1.3183			1.3237
STG/CAD		1.573			1.5779
AUD/CAD		1.0707			1.0739
CAD/JPY		78.1			77.8
CAD/CHF		0.9158			0.913
CAD/HKD		7.7635			7.1706
CAD/CNY		6.3075			6.3086
Commodities
Gold		$1,721			$1,731
OIL		$101.52			$99.82
Option Volatility
Canada
O/N		11.59%			12.61%
1 Week		8.84%			9.64%
1 Month		9.19%			9.49%
CBOE Volatilty
Index (VIX)		19.04