GFX Morning FX Commentary April 11th, 2012

Good Morning,

Today's expected range for the Canadian dollar against the US Dollar is .9975-1.0075

Today's expected range for the Canadian dollar against the Euro is 1.3140-1.3250

Today's expected range for the Canadian dollar against Sterling is 1.5900-1.6000

The US Dollar is weaker to start the day as European equity markets are positive on reports that EU officials stand ready to lend Spain the necessary funds to get them through the rest of this year and out to 2014 if borrowing costs become too expensive on the international bond markets, on the statement we saw Spanish bond yields fall and the Euro jumped higher to trade near 1.3150. Overall I still feel nervousness in Europe will continue to force the Euro to trade weaker in the coming weeks and months.

Sterling also had a great showing overnight as the UK retail Sales report showed a jump in sales for the first time in several months, clearly a good sign and a positive for the UK economy.

With the weakness in the US Dollar overnight, the Loonie was able to recover back towards parity. Yesterday saw the Loonie as weak as it has been in the longest time on the backs of the poor showing in North American equity markets. USD.CAD continues to trade in tight ranges and anytime we have a spike like we saw yesterday US Dollar sellers need to stand ready and take advantage to realize some extra value, over the last few months these types of moves have been few and far between and they have not been sustainable, it will be interesting to see if this move and be protracted above the 1.0050 level.

With North American equity markets poised for a stronger opening and a small recovery from the carnage yesterday USD.CAD should trade back below 1.0000 at some point this morning, we do get the release of the US Federal Reserve Beige Book which is a report on the overall health of the economy, we also have a slew of US Federal Reserve members speaking across the country so if any of them comment on interest rate hikes in the US we may see some volatility in the currency market.

Have a great day

Mike

GFX Morning Currency Rates
Wednesday, April 11 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0016			0.9985
CAD/USD		0.9984			1.0015
EUR/USD		1.3148			1.3074
EUR/CAD		1.317			1.3055
STG/CAD		1.5955			1.5802
AUD/CAD		1.0325			1.0272
CAD/JPY		80.68			81.26
CAD/CHF		0.9117			0.9205
CAD/HKD		7.7515			7.7775
CAD/CNY		6.2938			6.3173
CAD/MXN		13.0968			13.0571
Commodities
Gold		$1,661			$1,646
OIL		$101.59			$101.92
Option Volatility
Canada
O/N		11.77%			10.48%
1 Week		8.03%			8.06%
1 Month		8.83%			8.52%

Today's Economic Calendar

US

Fed Beige Book            14:00

Canada                        

Housing Starts for March   08:15