GFX Morning FX Commentary, June 11th, 2012

Good Morning,

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

Today’s expected range for the Canadian Dollar against the Euro is 1.2840-1.2975

Today’s expected range for the Canadian Dollar against Sterling is 1.5900-1.6025

The US Dollar is considerably weaker this morning as the currency markets have reacted to the news that the Spanish Government requested 100 Billion Euros from the EU rescue fund to shore up its banking system over the weekend, this make Spain the fourth country in the EU to request bailout funds. EURO.USD which had been trading weaker prior to this announcement surged to trade as high as 1.2670, equity markets around the world also jumped higher on the Spanish request as well as  positive news out of China so all in all a tough night for the US Greenback.

As we have seen with other countries all these loans only provide temporary relief and in fact while the Euro is still higher than our close Friday it is well off its overnight highs. Up next for the Euro will be the Greek elections on Sunday and then I am sure Italy will need a bailout in the coming weeks, this situation is far from over and should continue to make it very difficult for the Euro to maintain any long-term strength.

As you would guess the Canadian dollar is stronger this morning but considering world events it did not have an overly big trading range. USD.CAD now looks like it will settle into the 1.0200 to 1.0300 trading range for a while. Friday’s employment report created 7.5K new jobs which was pretty much as expected so I don’t think there is anything on the Canadian horizon (good or bad) that will greatly influence the Loonie in the coming weeks, for now USD.CAD direction will be influenced by events in Europe and the direction of the equity markets.

For today with equity markets pointing higher on the opening, I would expect that  USD.CAD should test a bit higher but trading ranges should be muted, play the 1.02 to 1.03 trading range for the next few days and leave your orders accordingly.

I will be out of the office this afternoon as the youngest Smith family member comes off the payroll as she graduates from McMaster.

Have a great week

Mike

GFX Morning Currency Rates
Monday June 11, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0237			1.0348
CAD/USD		0.9768			0.9663
EUR/USD		1.2564			1.2452
EUR/CAD		1.2863			1.2886
STG/CAD		1.5908			1.5961
AUD/CAD		1.0191			1.0174
CAD/JPY		77.49			76.56
CAD/CHF		0.9327			0.9312
CAD/HKD		7.5715			7.4911
CAD/CNY		6.2185			6.1516
CAD/MXN		13.5854			13.7061
Commodities
Gold		$1,593			$1,578
OIL		$84.94			$82.32
Option Volatility
Canada
O/N		14.36%			9.00%
1 Week		12.05%			10.00%
1 Month		10.61%			10.00%