GFX Morning FX Commentary, may 30th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0200-1.0300

Today's expected range for the Canadian Dollar against the Euro is 1.2760-1.2900

Today's expected range for the Canadian Dollar against Sterling is 1.5980-1.6100

The US Dollar is stronger this morning as the Euro has dropped to a 2 year low against the Greenback. Fears that the Spanish banking crisis is growing, a poorer than expected European consumer confidence report and an Italian bond auction that did not go all that well have all weighed on the common currency, EURO.USD fell to trade at 1.2430 and most likely will continue to trade weaker, this situation is not going away anytime soon. There are reports this morning hitting the wires that EU officials will meet tomorrow to look at re-capitalizing their banks with the funds coming from the EU rescue fund, we will see if this comes to fruition, if it does then Euro should get a temporary short-term boost.

With the stronger US Dollar the Loonie was weaker last night but it is actually hanging in there quite well at the moment trading in  narrow ranges around the 1.0250 level. If the European situation gets out of control you will see USD.CAD trade higher, it is a real nervous time in the currency markets at the moment and the Loonie will eventually be dragged along. The Loonie is still holding onto its strength against both Sterling and Euro for the moment, If you know that you will need these currencies in the near future you may want to consider doing some forwards at current levels and locking in these great rates.

With North American equity markets following their European counterparts by opening well down today there is a real possibility that USD.CAD could trade at the 1.0300 level but if it does I would not expect much of a follow through first time out.

Have a great day

Mike

GFX Morning Currency Rates
Wednesday May 30, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0288			1.0234
CAD/USD		0.972			0.9771
EUR/USD		1.243			1.2525
EUR/CAD		1.2789			1.2818
STG/CAD		1.6029			1.6041
AUD/CAD		1.0037			1.0062
CAD/JPY		76.81			77.65
CAD/CHF		0.9383			0.9354
CAD/HKD		7.5412			7.5794
CAD/CNY		6.176			6.1996
CAD/MXN		13.6153			13.6447
Commodities
Gold		$1,547			$1,572
OIL		$89.06			$91.22
Option Volatility
Canada
O/N		13.26%			12.84%
1 Week		10.68%			10.27%
1 Month		11.05%			10.99%

Today's Economic Calendar

USA
US Pending Home Slaes for April (14:00)
Various Fed Speakers today across the country

CANADA
Industrial Product Price for April (12:30)
Raw Materials Price Index for April (12:30)