GFX Morning FX Commentary October 23,2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9875-1.0025

Today’s expected range for the Canadian Dollar against the Euro is 1.2650-1.3050

Today’s expected range for the Canadian Dollar against Sterling is 1.59-1.6000

The US Dollar is marginally stronger this morning as the Euro has fallen off its overnight highs. The Euro is weaker this morning on a Moody’s downgrade of Spanish regional debt, a very discouraging French business confidence report and a newspaper report that Spain has told the EU that they will not hit their deficit reduction target this year. Once again we see any Euro strength slowed by bad news that ultimately seems to always pop up, this will probably still be the case moving forward until at the very least the Spanish Government seeks a bailout.

The Canadian Dollar is a bit weaker this morning on the back of the stronger US dollar, USD.CAD is so far maintaining it strength above the .9900 level. Currency activity will of course depend on the Bank of Canada announcement today where we are not expecting any change in interest rates, but we are expecting a little more cautious statement by the Bank and quite possibly indicating that interest rate hikes have been put on hold for a while. If this is the case then I think you will see USD.CAD jump towards parity but I honestly don’t think it will be able to hold this strength on the first go, a lot of the reason USD.CAD has jumped above .9900 in recent days is because the market is expecting this tone from the Bank so a lot of the move has already been built in.

I will report back on the Bank’s decision and its effects on the currency later this  morning

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9962			0.9925
CAD/USD		1.0038			1.0076
EUR/USD		1.3			1.3068
EUR/CAD		1.2953			1.2977
STG/CAD		1.5925			1.5926
AUD/CAD		1.0235			1.025
CAD/JPY		80.12			80.3
CAD/CHF		0.933			0.932
CAD/HKD		7.778			7.7828
CAD/CNY		6.2747			6.2987
CAD/MXN		13.4952			12.9572
Commodities
Gold		$1,708.58			$1,725
OIL		$87.62			$90.66
Option Volatility
Canada
O/N		9.79%			9.79%
1 Week		7.55%			7.55%
1 Month		6.97%			6.97%

GFX Morning Currency Rates
Tuesday October 23, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9962			0.9925
CAD/USD		1.0038			1.0076
EUR/USD		1.3			1.3068
EUR/CAD		1.2953			1.2977
STG/CAD		1.5925			1.5926
AUD/CAD		1.0235			1.025
CAD/JPY		80.12			80.3
CAD/CHF		0.933			0.932
CAD/HKD		7.778			7.7828
CAD/CNY		6.2747			6.2987
CAD/MXN		13.4952			12.9572
Commodities
Gold		$1,708.58			$1,725
OIL		$87.62			$90.66
Option Volatility
Canada
O/N		9.79%			9.79%
1 Week		7.55%			7.55%
1 Month		6.97%			6.97%