GFX Morning FX Commentary October 18th

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9740-.9820

Today’s expected range for the Canadian Dollar against the Euro is 1.2800-1.2900

Today’s expected range for the Canadian Dollar against Sterling is 1.5770-1.5850

The US Dollar is marginally weaker this morning as strong economic reports out of China helped push the Euro slightly higher off of its overnight lows. The Chinese Finance Ministry reported that its third quarter GDP grew by 7.4% and its Industrial Production and Retail Sales were better than expected. Recent numbers out of China and been poor so this is a bit of a turnaround and was well received by Asian equity markets. I think the Euro would have gone higher but it’s rise was interrupted  earlier in the morning when German Chancellor Merkel said the Euro crisis won’t be solved in “one go”. With the EU summit starting today and investors looking for positive developments on Greece can’t these politicians just learn when to keep their mouths shut. I am not sure  when any announcements are expected from the summit but I would think we will have enhanced volatility around any communique’s.

As we thought it would USD.CAD has moved back below the .9800 level yesterday and has held onto that move overnight, the fundamentals are just lining up for a stronger Canada and  I would not be surprised if we see the Loonie rally over the coming months and we get back near the .9500 level, time will tell if I am correct. In the short-term USD.CAD will continue to be ignored by currency traders and will continue to trade in narrow ranges.

Up today we get the US Philadelphia Fed Index and Leading indicator reports and after the very strong housing data yesterday the markets are looking for more positive news out of the US which should push equities higher and may push USD.CAD towards .9750. US Dollar sellers need to leave their intra-day orders around the .9800 level if they want to take advantage of any short-term pull back.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9773			0.9839
CAD/USD		1.0232			1.0163
EUR/USD		1.3108			1.3121
EUR/CAD		1.2813			1.2913
STG/CAD		1.5785			1.5905
AUD/CAD		1.0157			1.0172
CAD/JPY		81.05			79.97
CAD/CHF		0.9432			0.9366
CAD/HKD		7.9069			7.8561
CAD/CNY		6.3928			6.353
CAD/MXN		13.1032			13.0443
Commodities
Gold		$1,747			$1,751
OIL		$92.02			$92.27
Option Volatility
Canada
O/N		9.23%			8.89%
1 Week		6.74%			6.86%
1 Month		6.47%			6.68%