GFX Morning Commentary July 30th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0000-1.0100

Today's expected range for the Canadian Dollar against the Euro is 1.2270-1.2370

Today's expected range for the Canadian Dollar against Sterling is 1.5740-1.5840

The US Dollar is marginally stronger in quiet overnight trading markets, this morning the Spanish Government reported that their economy shrank by 0.4% last quarter (after a 0.3% drop in the previous quarter) and unemployment reached 24.6% (I imagine youth unemployment is much higher than 25%). On Thursday the ECB announces on interest rates and given the comments last week from Governor Draghi about protecting the Euro he is now under increased pressure to produce results at this meeting, if he does nothing then the Euro will get crushed.

In addition to the ECB we also get the US Federal Reserve announcing interest rate policy and with the expectation by investors that the Fed will add stimulus to the economy we may see some enhanced volatility this week.

The Canadian dollar had a quiet night trading against the Greenback, while it is holding onto its recent gains it does not seem able to break much lower and make a good run at parity. While I still think it can get back to parity  (especially is the news out of Europe remains positive) it may take strong action from  ECB and Federal Reserve announcements to get there. If these announcements disappoint then USD.CAD will be back up at 1.0200 very quickly and possibly higher.

Have a great week

Mike

GFX Morning Currency Rates
Monday July 30th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0038			1.008
CAD/USD		0.9962			0.992
EUR/USD		1.225			1.2273
EUR/CAD		1.2306			1.2373
STG/CAD		1.5763			1.5844
AUD/CAD		1.0533			1.0512
CAD/JPY		77.94			77.46
CAD/CHF		0.9751			0.9698
CAD/HKD		7.72			7.6873
CAD/CNY		6.3447			6.3269
CAD/MXN					13.3265
Commodities
Gold		$1,617			$1,622
OIL		$90.10			$89.48
Option Volatility
Canada
O/N		11.67%			7.94%
1 Week		8.45%			8.76%
1 Month		7.90%			8.09%

No North American Economic Releases Today