GFX Morning FX Commentary Oct 24th, 2012

Good Morning

Today’s expected range for the Canadian Dollar against the US Dollar is .9870-.9950

Today’s expected range for the Canadian Dollar against the Euro is 1.2800-1.2875

Today’s expected range for the Canadian Dollar against Sterling is 1.5840-1.5925

The US Dollar is marginally stronger this morning as weaker than expected numbers out of Europe have driven the Euro back below 1.2950 against the US Dollar. This morning the EU Zone reported that services and manufacturing indexes contracted in the first half of October, a clear indication that the debt crisis is hurting growth in the EU. The German Finance Ministry also reported that German business confidence dropped to its lowest level in more than two years. the ugly picture that is the EU economy continues. These poor numbers were offset somewhat by better than expected manufacturing numbers out of China, yesterday saw the Bank of Canada mention in their report that the slowdown in China was greater than expectation so hopefully these types (if they can be believed) of reportrs will help keep the Canadian export market strong.

The Canadian Dollar is marginally stronger and does look set to have USD.CAD break back below the .9900 level. After the surprise from the Bank of Canada yesterday I thought we would see the Loonie strengthen more but it looks like any strength will be gradual and over a longer period of time.

Trading today will be dominated by the Bank of Canada Monetary Policy report and the US Federal Reserve announcement on interest rates. The BOC Monetary Policy report is basically an expansion in greater detail of what the Bank said yesterday, every once in a while there are a few golden nuggets of information that grab the attention of currency traders and add volatility to the market. In the US we have the Fed’s interest rate announcement and for the most part we are not expecting any surprises, I think the currency market is looking towards Bernanke’s comments on the QE program and to see how long it will be in place for. We also get some US housing data so today could be a busy day on the equity and currency markets.

I am considering switching email services for this newsletter, it appears that 2-5 reader new emails are being rejected every day, if you find that all of a sudden you have stopped receiving the commentary drop me a direct line to msmith@gfxpartners.ca and  I will see about restoring your email address.

 

Have a great day
Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9906			0.9962
CAD/USD		1.0095			1.0038
EUR/USD		1.2943			1.3
EUR/CAD		1.2825			1.2953
STG/CAD		1.5864			1.5925
AUD/CAD		1.0229			1.0235
CAD/JPY		80.5			80.16
CAD/CHF		0.9431			0.933
CAD/HKD		7.8012			7.7571
CAD/CNY		6.3006			6.2747
CAD/MXN		13.1412			13.4952
Commodities
Gold		$1,710			$1,708
OIL		$86.81			$87.62
Option Volatility
Canada
O/N		10.00%			1.41%
1 Week		7.55%			7.54%
1 Month		7.10%			7.00%