GFX Morning Commentary July 11th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0140-1.0240

Today's expected range for the Canadian Dollar against the Euro is 1.2480-1.2600

Today's expected range for the Canadian Dollar against Sterling is 1.5810-1.5925

The USD dollar is marginally weaker this morning as currency markets react to the calls from Chinese Premier Wen for more investment in the Chinese economy and also the expectation that the release today of the Federal Reserve minutes from their last policy meeting will show that they are considering adding more stimulus to the economy, after a couple of down days hopefully the Fed will not disappoint and equity markets will jump higher.

In interesting news this morning the OCED came out with a report that they see the global demand for oil to drop over the coming year, no effect so far on the price of oil but I can’t imagine that it will help to push the price higher, also in the oil markets Iraq has passed Iran in oil production, I guess the US won the war after all. In European news the Spanish Government has announced a new austerity plan that includes 80 Billion  USD equivalent of cuts over the next three years,  I am not sure how this helps the country, youth unemployment is running at 25% and they are in danger of losing an entire generation, if the EU does not address growth soon I fear the situation will just get worse.

Yesterday saw the Loonie weaken off quite a bit which was surprising, I believe it was led by buyers of Euro as EURO.CAD was moving a lot higher  throughout the afternoon and EURO.USD moved very little. With the weaker US Dollar overnight USD.CAD was able to recover and we still trade in the 1.0100-1.0200 range

With the exception of the FOMC minutes there is not much else on today's calendar to liven up the currency markets, we do get the release of some trade data out of the US and Canada  but I don't expect it to have much effect on the currency. With equities pointing higher look for USD.CAD to move back towards 1.0150 today but I expect trading will be lackluster.

Have a great day

Mike

GFX Morning Currency Rates
Wednesday July 11th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0184			1.0169
CAD/USD		0.9819			0.9834
EUR/USD		1.2280			1.2312
EUR/CAD		1.2507			1.2520
STG/CAD		1.5807			1.5795
AUD/CAD		1.0454			1.0410
CAD/JPY		77.8300			78.1200
CAD/CHF		0.9598			0.9588
CAD/HKD		7.7544			7.7540
CAD/CNY		6.3643			6.3668
CAD/MXN		13.0518			13.0399
Commodities
Gold		1,577.4000			$1,593.50
OIL		84.8500			$85.06
Option Volatility
Canada
O/N		11.65%			11.60%
1 Week		8.44%			8.81%
1 Month		8.39%			8.42%

Today's Economic Calendar

USA
Trade Balance for May (8:30)
Wholesale Trade for May (10:00)
FOMC Minutes for June Meeting (14:00)

CANADA
Merchandise Trade Balance for June (8:30)