GFX Morning FX Commentary October 22nd, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9880-.9970

Today’s expected range for the Canadian Dollar against the Euro is 1.2960-1.3050

Today’s expected range for the Canadian Dollar against Sterling is 1.5900-1.5975

The US Dollar is marginally stronger this morning, the Euro is stronger as Spanish Prime Minister Rajoy’s party won a regional election in his home province, this is viewed as buying the Prime Minister some time as he decides on a bail-out or not. Most of the overnight currency trading seemed to focused around the Japanese Yen as that country struggles with growth in its economy. The Yen dropped for the seventh straight day (the longest streak in over 7 years) as exports have fallen the most since the tsunami and earthquakes of 2011. The Prime Minister of Japan is urging the Central Bank of Japan to take action but with interest rates at 0.1% for a very long time I am not sure the BOJ can make much of a difference, look for lots of intervention from the BOJ in the currency markets to start buying the yen.

The Canadian Dollar is marginally stronger and USD.CAD is off of its overnight highs. The market is still digesting both Finance Minister Flaherty’s and Bank of Canada Carney’s comments that the economy may not be growing as fast as expected. USD.CAD opens the week above the .9900 level and I think will remain there ahead of the Bank of Canada interest rate announcement tomorrow.

For today with Equities pointing higher after a disastrous day on Friday (the 19^th of October,1987 was the 25^th anniversary of Black Monday and funny enough my 2^nd wedding anniversary, I am not sure if there is any correlation there) USD.CAD should pullback a little today but once again I am not expecting a large trading range. The Canadian Dollar trading community will setup to see what the Bank of Canada has to say about the economy tomorrow morning and then we will get a better gauge of what will happen in the coming weeks.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9925			0.9868
CAD/USD		1.0076			1.0134
EUR/USD		1.3068			1.3046
EUR/CAD		1.2977			1.2879
STG/CAD		1.5926			1.5848
AUD/CAD		1.025			1.0223
CAD/JPY		80.3			80.24
CAD/CHF		0.932			0.938
CAD/HKD		7.7828			7.8312
CAD/CNY		6.2987			6.3342
CAD/MXN		12.9572			13.0545
Commodities
Gold		$1,725			$1,735
OIL		$90.66			$92.18
Option Volatility
Canada
O/N		9.79%			6.50%
1 Week		7.55%			7.25%
1 Month		6.97%			7.25%