GFX Morning FX Commentary, June 1st, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0340-1.0440

Today’s expected range for the Canadian Dollar against the Euro is 1.2770-1.2890

Today’s expected range for the Canadian Dollar against Sterling is 1.5880-1.6000

The US Dollar is stronger again this morning as the Euro has slid further on the news the spread between Spanish and German bond yields was at an all-time high and that Euro-Zone unemployment reached 11% last month. Also hurting equities and pushing the US Dollar higher was poor economic news out of China that showed that economy was slowing quicker than previously thought so clearly there is not much good economic news around and investors are running to the safe haven of US dollars and putting money into US treasuries.

We should at some point today get the results of the Irish vote on the EU Fiscal treaty, while a yes vote is expected if we do get a no vote

The Canadian Dollar is weaker on the back of the stronger US Dollar and now looks like it wants to try and break above the 1.0400 level today , with stock markets pointing down over 100 in North America I would not be surprised to see this happen. Up today the economic news will be dominated by the Canadian GDP report for March where we are expecting a growth rate of 1.9% (YoY) and a monthly growth rate of 0.3% and the US Employment report where we are expecting 150K new jobs to have been created. My fear is that if these numbers come in much worse than expected look for a sharp move higher for USD.CAD.

I heard on the news this morning that GM is dropping jobs as they close a production line and Bombardier is sending a number of manufacturing jobs to Mexico, it will only be a matter of time before the global slowdown hits Canada, we continue to bleed high paying manufacturing jobs that will not be returning.

Have a great day

Mike

GFX Morning Currency Rates
Friday June 01 , 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0384			1.0272
CAD/USD		0.963			0.9735
EUR/USD		1.2323			1.2403
EUR/CAD		1.2799			1.2742
STG/CAD		1.5911			1.5928
AUD/CAD		1.001			1.0004
CAD/JPY		75.24			76.67
CAD/CHF		0.9375			0.9421
CAD/HKD		7.4681			7.5526
CAD/CNY		6.1293			6.1968
CAD/MXN		13.9735			14.1209
Commodities
Gold		$1,555			$1,564
OIL		$84.72			$88.03
Option Volatility
Canada
O/N		12.73%			14.36%
1 Week		10.70%			10.71%
1 Month		11.52%			11.20%

Today's Economic Calendar

USA

Non-Farm Payrolls for May (08:30)
Employment Rate for May (08:30)
Personal Consumption for April (08:30)

CANADA

Gross Domestic Product for March (08:30)