GFX Morning FX Commentary July 27th, 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 1.2375-1.2475

Today's expected range for the Canadian Dollar against Sterling is 1.5810-1.5910

The US Dollar is marginally stronger this morning as the Euro has given back a little strength from yesterday's big move. This morning the reaction to ECB's Draghi comments on the Euro were met by interesting comments from the German Central Bank today. Most global investors yesterday took Draghi's comments to mean that the ECB would buy Spanish and Italian bonds if need be, this morning the Bundesbank came out and said that was not such a good idea, another great example of what I mean when I say the leadership in Europe is very lacking.

The Canadian Dollar had a quiet night with USD.CAD moving back up towards the 1.0100 level. Every time over the past few weeks where we see USD.CAD break below 1.0100,  the move quickly fizzles out and then moves higher. I think we will need a good break of 1.0050 before the currency pair has any chance at getting back to parity. The Loonie continues to hold onto its strength against the Euro and Sterling but is not breaking any new ground as it awaits the next big direction.

Currency markets could have some added volatility today as we get our first look at the 2nd quarter GDP numbers out of the States, we are expecting an annualized growth rate of  1.4% for the quarter.  Any number less than this should create the impression that the economy needs more stimulus from the Federal Reserve, which will push stock markets higher and will move USD.CAD lower.

Have a great weekend

Mike

GFX Morning Currency Rates
Friday July 27, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.008			1.01
CAD/USD		0.992			0.99
EUR/USD		1.2273			1.2224
EUR/CAD		1.2373			1.234
STG/CAD		1.5844			1.5728
AUD/CAD		1.0512			1.0489
CAD/JPY		77.46			77.45
CAD/CHF		0.9698			0.9722
CAD/HKD		7.6873			7.6812
CAD/CNY		6.3269			6.3204
CAD/MXN		13.3265			13.35
Commodities
Gold		$1,622			$1,615
OIL		$89.48			$89.75
Option Volatility
Canada
O/N		7.94%			11.61%
1 Week		8.76%			8.68%
1 Month		8.09%			7.27%

Today's Economic Calendar

USA
GDP for the 2nd Quarter (08:30)
Final Consumer Sentiment for July (9:55)

CANADA
None