GFX Morning FX Commentary, July 26th 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0050-1.0150

Today's expected range for the Canadian Dollar against the Euro is 1.2340-1.2440

Today's expected range for the Canadian Dollar against Sterling is 1.5760-1.5860

The US Dollar is in full retreat this morning as the rhetoric is really flying in Europe this morning. In a speech this morning, European Central Bank Governor Mario Draghi stated that the ECB “will do whatever it takes to preserve the currency”, these comments came after Spanish officials were calling for the ECB to do more and halt their growing interest rate costs. On the this statement the Euro jumped above the 1.2200 level against the Greenback in very volatile conditions, stock markets which had been weak all morning jumped higher as well. Once again we see nothing but words from EU officials as the European situation continues to decline, I think I will favour selling Euro at these levels, until I see these leaders get of their high horse and actually take concrete action then the Euro should continue to be vulnerable to decline.

With the overnight weakness in the US Dollar the Canadian dollar had its best night in months with USD.CAD falling back to near 1.0100, this was one of the most volatile overnight sessions we have seen this year. With nothing but secondary US data due out today and with North American stock markets going to open to the top side we should see  USD.CAD continue to move a bit lower, I would however caution US Dollar buyers who want to wait, every time we get below 1.0100 in recent weeks the US Dollar has rallied and it quickly becomes more expensive. If it was me and I needed some USD in the next few weeks I would be looking at current levels to buy some USD.

Have a great day

Mike

GFX Morning Currency Rates
Thursday July 26, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.01			1.0128
CAD/USD		0.99			0.9873
EUR/USD		1.2224			1.2144
EUR/CAD		1.234			1.236
STG/CAD		1.5728			1.5785
AUD/CAD		1.0489			1.0469
CAD/JPY		77.45			76.82
CAD/CHF		0.9722			0.9712
CAD/HKD		7.6812			7.6194
CAD/CNY		6.3204			6.2757
CAD/MXN		13.35
Commodities
Gold		$1,615			$1,591
OIL		$89.75			$88.52
Option Volatility
Canada
O/N		11.61%			12.55%
1 Week		8.68%			9.44%
1 Month		7.27%			8.90%

Today's Economic Calendar

USA
Durable Goods Orders for June (08:30)
Pending Home Sales for June (10:00)

CANADA
None