GFX Morning FX Commentary December 7th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9880-.9960

Today’s expected range for the Canadian Dollar against the Euro is 1.2800-1.2870

Today’s expected range for the Canadian Dollar against Sterling is 1.5870-1.5950

The US Dollar is stronger this morning as the increasingly bad economic data continues to pour out of Europe. Yesterday it was ECB Governor Draghi saying more stimulus may be necessary and hinting at an interest rate cut to support the EU economy, this morning poor production data out of Germany and the German Bundesbank (German Central Bank) downgraded German their economic forecast for German growth as the Euro area recession is slowing the region’s biggest economy. The only factor that gives the Euro any strength is when some bad news comes out of the USA ( such as the Fiscal cliff) and then the Euro jumps a bit, but we have continually seen over the past few months that the Euro cannot hold onto any strength for any length of time.

The Canadian Dollar is marginally weaker, the break of .9900 that I was looking for over the past couple of days never materialized and now with the stronger US Dollar the Loonie is under a bit of pressure again, we still trade in the .9900-.9950 range that we have been in for the last couple of weeks but now USD.CAD looks like it wants to test higher, we will see if it can make a move today.

Today’s trading will be dominated but the US and Canadian jobs reports, in Canada we are expecting 14K jobs to have been created last month with no change to the jobless rate, in the US we are expecting 90K jobs to have been created, the US number will be reduced because of the number of lost jobs due to Hurricane Sandy. If we get a poor Canadian number look for USD.CAD to jump higher, a strong showing in Canada will push us back towards the lower end of the range.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9927			0.9912
CAD/USD		1.0063			1.0088
EUR/USD		1.2928			1.3065
EUR/CAD		1.2835			1.2953
STG/CAD		1.5908			1.5967
AUD/CAD		1.039			1.0396
CAD/JPY		82.93			83.09
CAD/CHF		0.9414			0.9347
CAD/HKD		7.7862			7.7965
CAD/CNY		6.2675			6.28
CAD/MXN		12.9776			13.0359
Commodities
Gold		$1,697			$1,694
OIL		$86.10			$87.90
Option Volatility
Canada
O/N		5.94%			6.00%
1 Week		5.59%			5.00%
1 Month		5.22%			4.80%