GFX Morning FX Commentary August 27th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9860-.9960

Today’s expected range for the Canadian Dollar against the Euro is 1.2375-1.2450

Today’s expected range for the Canadian Dollar against Sterling is 1.56250-1.5700

The US Dollar is marginally weaker this morning as the German Business Confidence report while negative was not as bad as expected, trading ranges were muted overnight as the UK is shut down for the summer banking holiday. European equity markets were all slightly higher and the Euro was able to jump to a 7 week high but trading volumes were greatly reduced. The Euro has been on a run lately as investors are beginning to believe that the ECB is coming to grips with the financial crisis, personally I think it is just delaying the inevitable, in other Euro news over the weekend Greece was not offered any new favourable terms by German Chancellor Merkel to pay back its loans so the Greek economy continues to inch along towards default.

The Canadian Dollar had a very narrow overnight range and USD.CAD is slightly lower than where we closed on Friday. For the most part over the next few days I think it will stay within muted ranges as there is not much economic news on the horizon to create volatile trading conditions. Later this week market watchers will be waiting for US Fed Chairman Ben Bernanke speech at Jackson Hole to see if he will hint at further stimulus at the Fed’s September meeting. Any signs of a new round of stimulus should be equity market positive and US dollar negative (Canadian Dollar will rally) and we could see USD.CAD fall back to the .9800 level. Short-term US Dollar sellers now have to hope for a pullback towards .9950/1.0000 to try and get some extra value out of their transactions, I would not wait too long as the pressure right now is for USD.CAD to move lower.

 

Have a great week

Mike

GFX Morning Currency Rates
Monday August 27, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9898			0.9936
CAD/USD		1.0102			1.0064
EUR/USD		1.2524			1.2521
EUR/CAD		1.2398			1.2439
STG/CAD		1.5651			1.5734
AUD/CAD		1.0292			1.0325
CAD/JPY		79.49			79.01
CAD/CHF		0.9681			0.9648
CAD/HKD		7.8297			7.8015
CAD/CNY		6.4213			6.3934
CAD/MXN		13.3218			13.3229
Commodities
Gold		$1,673			$1,668
OIL		$97.05			$95.85
Option Volatility
Canada
O/N		7.50%			4.00%
1 Week		5.50%			6.40%
1 Month		6.50%			7.00%