GFX Morning FX Commentary, March 22nd, 2012

Good Morning,

Todays suggested range for the Canadian dollar against the US Dollar  is .9900 – 1.0000

Todays suggested range for the Canadian dollar against the Euro is 1.3100-1.3200

Todays suggested range for the Canadian dollar against Sterling  is 1.5720-1.5820

The US dollar is stronger this morning as the currency markets have reacted to poorer than expected manufacturing data around the world. Last night China reported weak manufacturing numbers and it is the 5th month in a row that the data has been poor, that release was followed earlier this morning by European Manufacturing data that showed a drop in manufacturing services across most of the region. As you can imagine the equity markets were all lower on the news and as a result the US Dollar was able to make gains with EURO.USD falling to trade back below the 1.3200 level, the Dollar also fell against Sterling with GBP.USD falling to trade at the 1.5780 level.

As you would expect with the overnight strength in the US Dollar, the Canadian Dollar lost some ground to its southern neighbor with USD.CAD trading back towards the .9950 level, I will watch with interest to see if USD.CAD can hold onto this move and close above this level, if it can do so today then we may see some volatility return to the market and get a break towards par, if USD.CAD does not break and close above the .9850 level then we will most likely move back towards .9900 and continue to trade back and forth in tight ranges.

With North American equity markets all pointing significantly lower to start the day we should see the Canadian Dollar remain under pressure but I will be watching to see if we can get a Toronto close above .9950 which as I mentioned may signal a new breakout. We do get the release of the Canadian Retail Sales report for January but unless it really comes in worse than expected I doubt it will have much effect on the currency.

Have a great day

Mike

GFX Morning Currency Rates
Thursday, March 22 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.995			0.9893
CAD/USD		1.005			1.0108
EUR/USD		1.3162			1.325
EUR/CAD		1.31			1.3112
STG/CAD		1.5723			1.5702
AUD/CAD		1.0321			1.0355
CAD/JPY		83.29			84.84
CAD/CHF		0.9199			0.9192
CAD/HKD		7.799			7.8456
CAD/CNY		6.3464			6.3872
Commodities
Gold		$1,638			$1,655
OIL		$106.10			$106.57
Option Volatility
Canada
O/N		11.19%			10.75%
1 Week		8.54%			8.18%
1 Month		8.45%			8.24%