GFX Morning FX Commentary, May 1st. 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9825-.9925

Today's expected range for the Canadian Dollar against the Euro is 1.3060-1.3150

Today's expected range for the Canadian Dollar against Sterling is 1.5980-1.6080

The US Dollar is marginally stronger this morning in very quiet overnight markets, holiday's in Asia and Europe helped to contribute to the lack of overnight volatility (the Canadian dollar had less than a 20 point trading range last night. The big news overnight was the Reserve Bank of Australia cutting interest rates by 0.50%, the financial markets were expecting a cut of 0.25% so this move is seen as being very aggressive. It gives wonder to what the RBA is thinking about the global recovery that would cause them to take such aggressive action.

Over the past few days we have seen some disturbing reports that the UK and parts of Europe are in a recession and the US recovery is starting to slow. With this kind of pressure on equity markets we may start to see the US dollar grow stronger as investors get out of equities and into US treasury bonds. I will watch closely over the next few weeks to see if the economic updates confirm this trend.

Yesterday saw the Canadian Dollar give up a lot of its strength as the GDP report for February showed the Canadian economy declined 0.2%, a trend which if continues may delay the plans of the Bank of Canada to raise interest rates sooner than later. I will be very interested in the Canadian jobs report for April due out next week, if the February economy contracted by 0.2% just how did the economy create 80k+ new jobs in March, something does not seem to add up. Look for USD.CAD to trade around the .9900 level for a little while as the currency awaits the next set of news on the economy.

Thanks to everyone for the kind wishes about our family vacation last week. If you are looking for a great Southern vacation checkout the hotel Gran Bahia El Portillo in Samana, Dominican Republic on Trip Advisor, it is a great place.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday, May 01 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9872			0.9817
CAD/USD		1.0129			1.0186
EUR/USD		1.3253			1.3218
EUR/CAD		1.3086			1.2979
STG/CAD		1.6001			1.5957
AUD/CAD		1.0185			1.0239
CAD/JPY		80.87			81.62
CAD/CHF		0.9176			0.9252
CAD/HKD		7.8569			7.7584
CAD/CNY		6.3875			6.4218
CAD/MXN		13.2066			13.212
Commodities
Gold		$1,663			$1,663
OIL		$104.58			$104.18
Option Volatility
Canada
O/N		9.50%			9.22%
1 Week		8.00%			8.18%
1 Month		8.00%			7.87%

US Economic Calendar

ISM Manufacturing Report for April 10:00am
Construction Spending for March 10:00 am

Canada

None