GFX Morning FX Commentary, May 15th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9950-1.0050

Today's expected range for the Canadian Dollar against the Euro is 1.2840-1.2950

Today's expected range for the Canadian Dollar against Sterling is 1.6040-1.6175

The US Dollar is marginally weaker this morning as the Euro has bounced off its 4 month low against the Greenback. In Europe this morning, Germany reported much better than expected 1st quarter growth figures, despite the rest of the EU region's declining growth numbers Germany managed to have a flat economy. EURO.USD was able to jump from it low of 1.2845 to trade at 1.2875, not a huge move but after the last few days Europeans have to be pleased that the selling pressure has abated for the moment. How long this strength remains is anyone's guess, today the President of Greece is once again trying to get the political parties to form a coalition Government but the likelihood of that happening is increasingly uncertain. If another election is called it should weigh on the Euro over the short-term with most Europeans hoping for a pro-austerity result.

A very quiet night for the Loonie as it continues to trade near parity to the US dollar, with the currency markets focus still on Europe at the moment it won't be a surprise if we have subdued trading ranges for the next few days. I still think the bigger risk at the moment is for USD.CAD to move higher especially if we see the situation in Europe destabilize and equity markets fall back.

Up today we get some economic reports out of the USA including Retail Sales for April, CPI for April and Empire State Manufacturing report for May, we may see some heightened volatility around these releases but for the most part USD.CAD will continue to trade off of equity markets, with Wall Street pointing much higher to start the day look for USD.CAD to test below parity at some point and trade in a narrow range today.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday, May 15 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.001			1.0048
CAD/USD		0.999			0.9952
EUR/USD		1.2854			1.2867
EUR/CAD		1.287			1.2932
STG/CAD		1.606			1.614
AUD/CAD		1.0007			1.0022
CAD/JPY		79.77			79.44
CAD/CHF		0.9329			0.9283
CAD/HKD		7.7554			7.7266
CAD/CNY		6.3085			6.288
CAD/MXN		13.6699			13.5878
Commodities
Gold		$1,558			$1,561
OIL		$94.68			$94.19
Option Volatility
Canada
O/N		12.73%			12.36%
1 Week		9.61%			9.60%
1 Month		9.61%			9.36%

Today's Economic Calendar

USA
CPI for April (08:30)
Empire State Manufacturing Index for May (08:30)
Retail Sales for April (08:30)

CANADA
None