GFX Morning FX Commentary, May 9th,2012

Good Morning

Today's expected range for the Canadian Dollar against the US Dollar is 1.0000-1.0100

Today's expected range for the Canadian Dollar against the Euro 1.2980-1.3100

Today's expected range for the Canadian Dollar against Sterling is 1.6140-1.6275

My apologies for the late and abbreviated commentary this morning, we have been very busy processing overnight orders.

The US Dollar is again stronger this morning as the Euro is weaker for the 8th day in a row against the Greenback. Questions still remain on whether a new Greek Government can be formed and in fact if a Government is formed will it support the austerity plan that is in place. Until this situation is resolved Euro will trade with a weak bias and Euro trading could be very volatile. If a coalition Government cannot be formed the Greeks would have to go back to the polls in June, which in fact may be the best possible outcome for financial markets.

The Canadian Dollar is finally starting to give up its strength to the USD, USD.CAD has now clearly broke above parity and is being pushed higher on the concerns about Greece pulling out of the Euro, I really don’t know how far this rally will extend but I believe US Dollar sellers need to take advantage of this move by doing at least some small forward contracts, each time USD.CAD has broken higher over the past 6 months it has eventually pulled back when markets calmed down.

With North American equity markets again in the red I think we could easily see USD.CAD hit the 1.0075 level today and possibly set up for a run to 1.0100 at some point.

Have a great day

Mike

GFX Morning Currency Rates
Wednesday, May 09 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0036			0.9976
CAD/USD		0.9964			1.0024
EUR/USD		1.2972			1.3022
EUR/CAD		1.3021			1.2994
STG/CAD		1.6176			1.6105
AUD/CAD		1.0099			1.011
CAD/JPY		79.3			79.86
CAD/CHF		0.9219			0.924
CAD/HKD		7.7335			7.7782
CAD/CNY		6.284			6.3205
CAD/MXN		13.3983			13.27
Commodities
Gold		$1,586			$1,627
OIL		$96.27			$96.79
Option Volatility
Canada
O/N		12.53%			11.43%
1 Week		9.57%			8.69%
1 Month		9.16%			8.55%