GFX Morning FX Commentary, April 17th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9940-1.0040

Today's expected range for the Canadian Dollar against the Euro is 1.3070-1.3170

Today's expected range for the Canadian Dollar against Sterling is 1.5870-1.5970

The US Dollar is weaker this morning as the Spanish bond auction performed much better than expected with Spain able to borrow more than forecast at acceptable rates. The Euro also benefited from a stronger than expected German investor confidence survey, yesterday EURO.USD looked like it wanted to break below the 1.3000 level, this morning it trades above the 1.3130 level so overall a good session for the Euro. The Loonie has also lost some ground to the Euro with EURO.CAD trading higher near the 1.3100 level.

With the weakness in the US Dollar overnight the Loonie pulled back a little strength but again USD.CAD traded in a very tight range but  still trades close to par. Today's early trading will focus on the Bank of Canada interest rate announcement (9:00 am) and most importantly what Governor Carney has to say about future rate hikes. For some time now he has indicated that he is very unhappy with the low level of  interest rates and the high level of domestic debt in the country, if he indicates that with the improving economic picture there is room to raise rates sooner than previously thought the Canadian Dollar should stage a big rally, if it is a stay the course statement then USD.CAD should move back above par and the Canadian currency market will remain quiet.

As always I will send out a quick update shortly after the announcement but barring any surprises with North American markets pointing a bit higher to start the day I would not be surprised if USD.CAD moved lower to test the .9950 level.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday, April 17 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9968			0.9986
CAD/USD		1.0032			1.0014
EUR/USD		1.3131			1.3027
EUR/CAD		1.3092			1.3011
STG/CAD		1.5905			1.582
AUD/CAD		1.0337			1.0339
CAD/JPY		80.86			80.79
CAD/CHF		0.9174			0.9236
CAD/HKD		7.7835			7.7592
CAD/CNY		6.3185			6.3206
CAD/MXN		13.1945			13.2568
Commodities
Gold		$1,655			$1,649
OIL		$103.60			$102.56
Option Volatility
Canada
O/N		11.54%			11.30%
1 Week		8.87%			8.67%
1 Month		8.60%			8.42%

Morning Economic Calendar

USA
Housing Start and Building Permits for March (08:30)
Industrial Production and Capacity Utilization for March (08:30)

Canada
Maufacturing Shipments For February (08:30)
BoC Policy Announcement (09:00)