GFX Morning Commentary, June 4th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0350-1.0450    

Today's expected range for the Canadian Dollar against the Euro is 1.2880-1.3000   

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

The US Dollar is marginally stronger this morning as world equity markets have fallen off, Friday's poor US jobs report (69K new jobs vs. expectation of 150K) have left investors fearing another global recession like we saw in 2008 after the Lehman brothers collapse. There is a report on Bloomberg this morning that banks around the world have stopped lending to each other, a situation which made the 2008 recession much worse. If the flow of money is indeed slowing then the world economy will have a tough time sustaining growth and we will be in for a tough time over a longer period.

The Canadian dollar is marginally stronger this morning in a narrow trading range as the Jubilee holiday in the UK left overseas currency markets quiet, USD.CAD still looks like it wants to move higher but any such  move depends on world events. Closer to home tomorrow, we get the Bank of Canada interest rate policy announcement and while there is very little chance of a rate hike market watchers will be paying very close attention to Governor Carney's forward looking comments, any hint of a rate hike sooner than later should give the Loonie a boost and drive USD.CAD lower, I think this announcement could create volatile trading conditions.

Up today with little in the way of economic news and equity markets pointing lower I would not be surprised to see pressure for USD.CAD to test higher, US Dollar buyers should try and grab some on any fall back towards 1.0375, if we get more negative news out of Europe then USD.CAD will jump higher quickly.

Have a great week

Mike

GFX Morning Currency Rates
Monday June 04, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0383			1.0384
CAD/USD		0.9631			0.963
EUR/USD		1.2436			1.2323
EUR/CAD		1.2916			1.2799
STG/CAD		1.5976			1.5911
AUD/CAD		1.0074			1.001
CAD/JPY		75.18			75.24
CAD/CHF		0.9291			0.9375
CAD/HKD		7.4677			7.4681
CAD/CNY		6.1264			6.1293
CAD/MXN		13.7225			13.9735
Commodities
Gold		$1,625			$1,555
OIL		$82.32			$84.72
Option Volatility
Canada
O/N		14.53%			12.73%
1 Week		12.01%			10.70%
1 Month		11.68%			11.52%

Today's Economic Calender

USA
Factory Orders for April (10:00)

CANADA
None