GFX Morning FX Commentary, June 29th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0175-1.0275

Today's expected range for the Canadian Dollar against the Euro is 1.2850-1.2975

Today's expected range for the Canadian Dollar against Sterling is 1.5930-1.6050   

The US Dollar is considerably weaker this morning as finally some positive news from the most recent EU leader summit has pushed EURO.USD and equity markets much higher this morning.

EU leaders have changed the rules of the Spanish banking bail-out so the rescue funds can lend directly to Spanish banks without the Government taking on the massive debt, provisions for Italy should they need it were also made available. The financial markets seem to like this move and it would be have been very interesting to have been at the meeting, from everything I read French President Francois Hollande led a back door run around German Chancellor Merkel to get this proposal through the meeting, I get the feeling that France and Germany will not get along much over the next few years, I wonder if they all got together yesterday to watch the football game or went their separate ways.

With EURO.USD jumping back up to 1.2600 (largest single day gain this year) it will be interesting to see if the Euro can hold onto the momentum for an extended period of time.

As you would expect with the US Dollar much weaker the Loonie has jumped stronger this morning with USD.CAD falling back below the 1.0300 level. Yesterday saw the Loonie trade with a very weak bias and it caught us by surprise as the other commodity currencies held their strength against the USD. The Loonie has lost a little ground against the Euro and Sterling as their overnight strength have reduced the Lonnie’s buying power.

Remember to get you weekend orders in, given all that is going on in the world Monday (we are closed) the currency markets have the chance to be a very volatile so you want to make sure that you take advantage of the Canadian holiday.

I wish everyone a great Canada Day weekend, we sometimes take it for granted but we do live without a doubt in the best country in the world.

Mike

GFX Morning Currency Rates
Friday June 29th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0236			1.0267
CAD/USD		0.9764			0.974
EUR/USD		1.2583			1.2429
EUR/CAD		1.2883			1.2764
STG/CAD		1.598			1.5964
AUD/CAD		1.0422			1.0331
CAD/JPY		77.62			77.24
CAD/CHF		0.9323			0.9403
CAD/HKD		7.5703			7.5488
CAD/CNY		6.2054			6.1889
CAD/MXN		13.1024			13.2733
Commodities
Gold		$1,572			$1,569
OIL		$80.13			$80.03
Option Volatility
Canada
O/N		9.89%			13.40%
1 Week		10.26%			9.13%
1 Month		9.64%			9.07%

GFX Morning FX Commentary, June 28th, 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 1.2750-1.2875

Today's expected range for the Canadian Dollar against Sterling is 1.5950-1.6075

The US Dollar is marginally stronger as yet again Italy is forced to pay higher borrowing costs to borrow funds on the international bond market. The Euro was also hit by reports from the IFO report that said the current crisis will hurt the German economy this year and a higher than expected unemployment rate, the current crisis continues.

As reported yesterday the EU summit starts today and as of my writing there have been a few comments from the German finance minister that are causing confusion in the Euro market, it just reinforces my view that current leadership is incapable of solving this crisis, why can’t the just keep their mouths shut until the figure this out. Financial markets will be looking for any signs of the easing of austerity measures and polices based on growth, one thing that we will not see is the announcement of the issuing of EU bonds, something I believe would be well received by financial markets. If I see any serious developments I will send out a currency alert,

The Canadian Dollar continues to trade within narrow overnight ranges and for all purposes is being ignored by global financial markets. This will change and soon but until we hear from the EU summit, Canadian Dollar trading will remain subdued.

This morning,  a major M&A deal was announced that may affect the Canadian Dollar, Malaysian based Petronas is buying Progress Energy for a reported $4.8B Canadian dollars in an all cash deal. If Petronas has to come to market and buy the Dollars then you will see USD.CAD fall back below 1.0200, with the deal closing today my guess would be that they have already bought the CAD so it may have limited affect. It is just me or will we as Canadians no longer own any of our own resources anymore?

Two other items of note to keep in mind for longer term trades are a possible purchase of RIM and an oil strike in Norway. RIM will report an operating loss today and the stock will fall further as it starts to eat into its pile of cash making it a cheaper takeover target which when it occurs ( and I believe it is inevitable) would have a short-term effect on the Canadian Dollar. In Norway an national strike by oil workers is underway and to date has reduced supply by 15% (240,000 barrels per day) of the total Norwegian production. if this strike affects the Global supply of oil (Norway is the 8^th largest supplier of oil in the world) then you will see a jump in the price of oil and the Loonie would benefit. To date the Norwegian Government is not planning any action to end the strike.

For today with North American equity markets pointing lower and in my opinion little substance coming from the EU summit look for USD.CAD to test higher in narrow trading ranges.

A quick reminder that we will be closed on Monday for Canada Day but the international currency markets will be open so make sure you get your orders in early, on Cad holidays we often see enhanced volatility so you want to make sure you take advantage of it.

Have a great day

Mike

GFX Morning Currency Rates
Thursday June 28, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0267			1.0247
CAD/USD		0.974			0.9758
EUR/USD		1.2429			1.2495
EUR/CAD		1.2764			1.2806
STG/CAD		1.5964			1.6014
AUD/CAD		1.0331			1.0324
CAD/JPY		77.24			77.56
CAD/CHF		0.9403			0.9373
CAD/HKD		7.5488			7.5648
CAD/CNY		6.1889			6.1998
CAD/MXN		13.2733			13.4381
Commodities
Gold		$1,569			$1,568
OIL		$80.03			$79.13
Option Volatility
Canada
O/N		13.40%			13.50%
1 Week		9.13%			9.85%
1 Month		9.07%			9.50%

Today's Economic Calendar

USA
GDP for Q1-(08:30)

CANADA
None

GFX Morning FX Commentary, June 27th, 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 1.2780-1.2900

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

The US Dollar is marginally stronger in very narrow trading ranges as the Euro is weaker on higher borrowing costs for Italy this morning. Markets should remain quiet ahead of the EU summit starting tomorrow on the hope that some positive news will come out of it but I am not holding out much hope.

Many economists have stated that the solution to the problem is for the EU to forge a closer financial bond by issuing common EU bonds which would be backed by all the countries in the Union. As I mentioned yesterday Germany is sternly opposed to this and yesterday afternoon German Chancellor Angela Merkel stated in a not so subtle manner that it would only happen over "her dead body". Nice words from a world leader that is supposed to be leading Europe out of this crisis.

No change for the Canadian Dollar as once again it trades in tight overnight ranges as it awaits developments in the Global economy.

Up today we do get the release of some secondary US housing data but with the EU summit the big event this week I doubt much will happen today.

Have a great day

Mike

GFX Morning Currency Rates
Wednesday June 27, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0247			1.0254
CAD/USD		0.9758			0.9752
EUR/USD		1.2495			1.2497
EUR/CAD		1.2806			1.2818
STG/CAD		1.6014			1.6039
AUD/CAD		1.0324			1.0307
CAD/JPY		77.56			77.32
CAD/CHF		0.9373			0.9363
CAD/HKD		7.5648			7.5583
CAD/CNY		6.1998			6.2018
CAD/MXN		13.4381			13.5247
Commodities
Gold		$1,568			$1,585
OIL		$79.13			$79.36
Option Volatility
Canada
O/N		13.50%			13.70%
1 Week		9.85%			9.86%
1 Month		9.50%			9.51%

Today's Economic Calendar

USA
Durable Goods Orders for May (08:30)
Pending Home Sales for May (10:00)

CANADA
None