GFX Morning FX Commentary August 28th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9850-.9925

Today's expected range for the Canadian Dollar against the Euro is 1.2370-1.2450

Today's expected range for the Canadian Dollar against Sterling is 1.5580-1.5650

The US Dollar is weaker this morning as the Euro jumped back above 1.2500 against the Greenback, reports showed this morning’s Spanish debt auction performed much better than expected. Investors seem to be betting that the ECB and the EU are coming up with a new plan to counter the growing financial crisis and as such are rewarding troubled countries with lower interest rates, time will tell if this will last for the long run. In an interesting side note ECB Governor Draghi announced that he will not be attending the Jackson Hole Central Bank meetings later this week citing a heavy workload over the next few days, I wonder if he has something up his sleeve.

Sterling is also lower this morning as GBP.USD is weaker on a very poor housing report which showed house price continues to slip, investors are banking that continued weakness in the UK housing market will lead to another recession in the UK.

After a very quiet day yesterday as the Canadian Dollar continues to hold onto recent strength but does seem that it is just waiting for any development to get it moving again. Bernanke's speech at Jackson Hole later this week will most likely give some momentum to the FX market, if Bernanke’s speech is pro further stimulus the equities will jump and USD.CAD will fall back, if it suggests the status quo then just the opposite will happen. Ahead of this USD.CAD should remain relatively stable.

For today with only Consumer Confidence and the Richmond Fed index out of the US being released we should once again have a quiet market, US Dollar buyers should look to leave their orders at .9850 and short-term US Dollar sellers should leave their orders at the .9925 level, I think it would take a lot to push us outside these levels today.

 

Have a great day

Mike

GFX Morning Currency Rates
Tuesday August 28, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9886			0.9898
CAD/USD		1.0114			1.0102
EUR/USD		1.2545			1.2524
EUR/CAD		1.2409			1.2398
STG/CAD		1.5611			1.5651
AUD/CAD		1.0258			1.0292
CAD/JPY		79.53			79.49
CAD/CHF		0.9676			0.9681
CAD/HKD		7.838			7.8297
CAD/CNY		6.4235			6.4213
CAD/MXN		13.3282			13.3218
Commodities
Gold		$1,664			$1,673
OIL		$96.90			$97.05
Option Volatility
Canada
O/N		7.40%			7.50%
1 Week		5.50%			5.50%
1 Month		6.40%			6.50%