GFX Morning FX Commentary, May 10th, 2012

Good Morning,

Today’s suggested range for the Canadian dollar against the US Dollar  is ..9960-1.0060

Today’s suggested range for the Canadian dollar against the Euro is 1.2920-1.3050

Today’s suggested range for the Canadian dollar against Sterling is 1.6140-16250

The US Dollar is mixed this morning as EURO.USD seems to have found some support for the time being. The inability of the Greek political parties to form a coalition Government is still dominating global financial markets, this morning ECB council member Axel Weber said there is are a real risk of a Greek default, despite this election result the Emergency Rescue Fund did make the payment to Greece this month so I hope that payment was not in vain.  EURO.USD continues to trade below the 1.3000 level and will most likely test lower, if the Greek parties cannot form a Government then the Greek people must go back to the polls  for another election in June.

In the UK the Bank of England announced that they were keeping interest rates at present levels and not adding any further stimulus to the economy. Sterling jumped higher on the report as I think most investors may have been expecting a possible rate cut to add stimulus to the economy, the FTSE gave up some gains in London and Sterling was able to extend some small gains on this announcement.  Overall I think the UK is still in for some very tough times and Sterling should continue to trade with a weak bias.

The Canadian Dollar has started to recover this morning and USD.CAD now looks like it wants to break back below parity, I think we will see this kind of movement, back and forth around parity until the Greek situation is resolved. We may be in for a volatile day as we get Trade numbers from both sides of the border this morning and also Federal Reserve Chairman Bernanke is speaking on the state of US banking, then the Canadian markets will start to set up for the release of the Canadian April jobs report tomorrow. We are expecting an increase of 10k new jobs to have been created but I will be watching closely what the revised number for March is. If you recall in March the economy created 80+K new jobs and that number did not jive with the fact that in February the economy contracted, if we see a big revision to this number look for USD.CAD to jump much higher.

For today with the uncertainty in Europe still trying to push USD.CAD higher I think US dollar buyers need to jump at the chance to buy some USD if we see USD.CAD trading below par, there are a lot of things on the horizon that can create volatile trading conditions and if they are negative it will push the USD much higher.

Have a great day

Mike

GFX Morning Currency Rates
Thursday, May 10 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0007			1.0036
CAD/USD		0.9993			0.9964
EUR/USD		1.2944			1.2972
EUR/CAD		1.2957			1.3021
STG/CAD		1.6155			1.6176
AUD/CAD		1.0118			1.0099
CAD/JPY		79.6			79.3
CAD/CHF		0.9267			0.9219
CAD/HKD		7.754			7.7335
CAD/CNY		6.3064			6.284
CAD/MXN		13.4579			13.3983
Commodities
Gold		$1,591			$1,586
OIL		$96.33			$96.27
Option Volatility
Canada
O/N		13.53%			12.53%
1 Week		10.50%			9.57%
1 Month		9.58%			9.16%

Today's Economic Calendar

USA
Trade Balance for March (08:30)

CANADA
Merchandise Trade Balance for march (08:30)
New Housing price Index for March (08:30)