GFX Morning Commentary march 15th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9875-.9975

Today’s expected range for the Canadian Dollar against the Euro is 1.2940-1.3050

Today’s expected range for the Canadian Dollar against Sterling is 1.5530-1.5650

The US Dollar is for the most part unchanged from yesterday's close in narrow trading conditions. The US Dollar is much stronger against the Yen but relatively stable against the Euro and Sterling, the mood among currency traders seems to be changing to a stronger US Dollar environment as the recovery in the USA is gathering steam.

The Euro economy continues to look vulnerable as the most recent employment reports showed that overall EU employment fell 0.2%, employment is only growing in Germany, Austria and Finland and actually dropped over 2.5% in Portugal. If an economy ever needs to create jobs it is Spain and Portugal, if these economies do not grow they will not be able to control their deficits and we all know what will happen next, get ready for Greece II (the sequel is never as good as the original).

Sterling is hanging in there despite the news yesterday that the bond rating agency Fitch put the UK on negative credit watch, the UK has retained its AAA status but that now remains tentative at best.

The Canadian Dollar had another quiet night but looks to be losing ground to the US Dollar, USD.CAD is just a little bit higher each morning and there is nothing on the immediate horizon that will change this pattern. Yesterday the Federal government changed the rules on foreign ownership of the Canadian Telecom space that could be a long-term Canadian dollar positive, nothing will happen in the short-term but if a you get a big US or European carrier buying a smaller Canadian player you may see a long-term benefit to the Loonie which I also believe would be a great positive for the Canadian consumer. In Canada we pay some of the highest prices for wireless services and it is because the three big carriers operate in a protected environment (very similar to our banking system) and as a result they are allowed to overcharge for their services, hopefully more competition will reduce wireless fees to the consumer.

Up today we get further indications of the modest US recovery with the release of the Philadelphia Fed index and the Empire State Manufacturing index, (both are economic updates from their particular regions in the US) and both are expected to be positive. With the US Dollar on a bit of a roll and equity markets pointing higher we should see USD.CAD continue to inch higher today.

Have a great day

Mike

GFX Morning FX Rates
Thursday March 15th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9934			0.9915
CAD/USD		1.0066			1.0085
EUR/USD		1.3042			1.3065
EUR/CAD		1.2957			1.2956
STG/CAD		1.5558			1.5565
AUD/CAD		1.0419			1.0381
CAD/JPY		83.43			84.15
CAD/CHF		0.9343			0.934
CAD/HKD		7.814			7.8277
CAD/CNY		6.3749			6.3861
Commodities
Gold		$1,646.70			$1,659.01
OIL		$105.53			$106.51
Option Volatility
Canada
O/N		11.78%
1 Week		8.99%
1 Month		8.64%