GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0610-1.0680

Today’s expected range for the Canadian Dollar against the Euro is 1.4710-1.4780

Today’s expected range for the Canadian Dollar against Sterling is 1.7570-1.7640

The US Dollar is weaker after the Christmas Holiday break, yesterday saw the US economy report some strong employment data as the first time recipients of unemployment benefits dropped more than expected, this number again pushed American equity markets to a new record high and the US Dollar gave up some strength. EURO.USD has jumped to its strongest level since October 2011, the Euro also benefitted from Central Bank officials commenting that keeping EU interest rates low may endanger the political reforms that have been achieved. USD.JPY rose to trade at a new 5-year high as the strong news out of the US economy continue to reduce the need for Japanese investors to send money home.

The Canadian Dollar was not able to take advantage of the weak US Dollar over the holiday and USD.CAD continues to trade around the 1.0650 level with the continued expectation that the Loonie will continue to weaken over the coming days. With no economic news out today and it being the first day back after the Christmas holiday I would not expect much of a trading range but given that most money center banks are at half-staff volatility may be a bit stronger throughout the day. We will be watching to take advantage of any spikes in either direction.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0646			1.0613
CAD/USD					0.9422
EUR/USD		1.3856			1.3669
EUR/CAD		1.4748			1.4521
STG/CAD		1.7606			1.7375
AUD/CAD		0.9493			0.9469
CAD/JPY		98.49			98.21
CAD/CHF		0.8299			0.8427
CAD/HKD		7.2638			7.2843
CAD/CNY		5.6998			5.7192
CAD/MXN					12.2297
Commodities
Gold		$1,210.50			$1,198.60
OIL		$99.58			$99.17
US DOLLAR INDEX
P.CLOSE		80.59			80.59
OPEN		79.97			80.66
US 10YR YIELD		2.99%			2.95%

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0580-1.0650

Today’s expected range for the Canadian Dollar against the Euro is 1.4500-1.4560

Today’s expected range for the Canadian Dollar against Sterling is 1.7350-1.7420

The US Dollar is marginally stronger this morning in quiet overnight trading ranges, the markets have already started to wind down for the Christmas holiday break. The big mover overnight was USD.JPY as the Greenback almost reached a 5-year high against the Yen. The Dollar is moving stronger against the Yen as the US economy is starting to unwind stimulus where the Japanese economy is continuing to increase it stimulus package, we should see the Yen continue to weaken over the next few months.

We should have a quiet day as markets wind up around noon, we do get the release of some secondary data this morning including US durable goods orders for the month of November, we may see a little bit of volatility when that report comes to market but for the most part we should remain near current levels over the holiday break.

Our office will be closing today at noon and we have a cut-off time for deals settling today at 11:00 am, if you do need to do anything for today please contact us early so we can make sure it gets settled. As the Loonie will be trading in the US markets on Thursday make sure you get your orders in early.

On behalf of everyone here at GFX let me take this opportunity to wish all readers a very Merry Christmas, even if you do not celebrate the holiday enjoy the quiet time with your families.

Have a great holiday

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0613			1.06
CAD/USD		0.9422			0.9433
EUR/USD		1.3669			1.3684
EUR/CAD		1.4521			1.451
STG/CAD		1.7375			1.7339
AUD/CAD		0.9469			0.9477
CAD/JPY		98.21			97.94
CAD/CHF		0.8427			0.8444
CAD/HKD		7.2843			7.2929
CAD/CNY		5.7192			5.7267
CAD/MXN		12.2297			12.1954
Commodities
Gold		$1,198.60			$1,195.00
OIL		$99.17			$98.95
US DOLLAR INDEX
P.CLOSE		80.59			79.98
OPEN		80.66			80.6
US 10YR YIELD		2.95%			2.75%

 

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0560-1.0630

Today’s expected range for the Canadian Dollar against the Euro is 1.4500-1.4560

Today’s expected range for the Canadian Dollar against Sterling is 1.7310-1.7380

The US Dollar is weaker this morning as investors start to take their profit on the massive long US Dollar positions that the held before the Federal Reserve announcement on tapering of their stimulus program last week. The big movers overnight were USD.JPY that dropped to trade at 103.80, EURO.USD rose to trade at 1.3695 and Sterling rose to trade at 1.6365. I think we will continue to see enhanced volatility over the next few hours ahead of the Christmas holiday period, with most banks running skeleton staff for the holidays we can quite often see exaggerated movement during these periods.

Perhaps the biggest currency mover overnight was the Canadian Dollar as it rallied over 100 points from its high up near 1.0700 last week, investors who were exceedingly short Canadian Dollars have started to buy back those positions and as a result USD.CAD has dropped significantly. I still hold my view that the Canadian Dollar will weaken into the new year so this drop represents a great opportunity for US Dollar buyers to grab some US.

Up today we do get some secondary US data but we also get the Canadian GDP report for October, given the current holiday environment we may have quite a busy morning if the GDP report is significantly different from market expectation.

With the Holiday’s now upon us GFX will have holiday hours to match those of the banks, we will close tomorrow at noon and reopen on Friday the 27^th for a full day, the following week we will close at noon on the 31^st and then reopen on the 2^nd. I remind all readers that while we will be closed on the 26^th the US markets will be open so make sure that you leave your orders ahead of that and take advantage of any opportunities that arise.

Have a great week.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0600			1.0667
CAD/USD		0.9433			0.9374
EUR/USD		1.3684			1.3657
EUR/CAD		1.451			1.3652
STG/CAD		1.7339			1.7427
AUD/CAD		0.9477			0.9457
CAD/JPY		97.94			97.86
CAD/CHF		0.8444			0.8417
CAD/HKD		7.2929			7.2631
CAD/CNY		7.2929			7.2631
CAD/MXN		12.2075			12.0954
Commodities
Gold		$1,195.20			$1,195.00
OIL		$98.95			$98.86
US DOLLAR INDEX
P.CLOSE					80.62
OPEN		80.6			80.65
US 10YR YIELD		2.75%			2.95%

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0675-1.0750

Today’s expected range for the Canadian Dollar against the Euro is 1.4620-1.4700

Today’s expected range for the Canadian Dollar against Sterling is 1.7510-1.7600

The currency markets have had quite a volatile 24 hours as traders react to the news that the US Federal Reserve has started to cut back on the stimulus they are providing to the economy, they have embarked on the long road that will take years to get them back to a normal interest rate environment. In his last press conference of his tenure as chairman of the US Federal Reserve Ben Bernanke stated that further reductions should come in around the $10B a month level but it is not set in stone and will be adjusted both up and down depending on the status of the economy.

The market pretty much reacted as we thought it would, there were some wild swings in the currency market with the overall effect being a stronger US Dollar. I was a bit surprised that the stock markets did not give up any gains, they in fact had a real strong day with the Dow Jones ending up over 200 points on the day. I think that sends a signal that equity markets are very happy that the Fed is reducing stimulus in a very slow fashion.

USD.CAD pretty much played out as we thought it would, it first took a run at 1.0700, backed off and then took another run overnight, we still cling to our view that the US Dollar will push higher against the Loonie but for now markets should return to normal volatility and we will see USD.CAD range trade around the 1.0700 level for a little while.

Up today we do get some secondary data out of the US so if that data remains positive then we should see continued pressure on USD.CAD to move higher throughout the day.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0705			1.0637
CAD/USD		0.9341			0.9401
EUR/USD		1.3686			1.3748
EUR/CAD		1.4655			1.4626
STG/CAD		1.753			1.7395
AUD/CAD		0.9491			0.947
CAD/JPY		97.2			96.76
CAD/CHF		0.8352			0.8353
CAD/HKD		7.2361			7.2824
CAD/CNY		5.6688			5.7047
CAD/MXN		12.0954			12.1903
Commodities
Gold		$1,204.00			$1,232.00
OIL		$97.73			$97.23
US DOLLAR INDEX
P.CLOSE		80.62			80.21
OPEN		80.65			80.27
US 10YR YIELD		2.89%			2.85%

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0600-1.0700

Today’s expected range for the Canadian Dollar against the Euro is 1.4600-1.4700

Today’s expected range for the Canadian Dollar against Sterling is 1.7370-1.7470

The US Dollar is marginally stronger this morning as the financial markets anxiously await the word from the US Federal Reserve at 2:00 pm today. USD.JPY was the big mover overnight as Japan reported a record trade deficit in November, a clear sign that the weaker yen is boosting the export market for Japanese goods, the opposite side to that coin of course is higher import costs which will drive inflation higher.

The Canadian Dollar is weaker this morning as it has rejected the 1.0600 level for the time being and it looks like USD.CAD wants to move back higher towards 1.0700 at the moment. All of this will of course be moot as any direction today and over the next few sessions will depend on what the Fed does with their stimulus program.

My own feeling (and it is not based on any insight to what the Fed will do) is that they will announce a gradual tapering of stimulus which should initially drive USD.CAD above 1.0700 and then it will settle down, I believe that the positive signs from the US economy will allow them to start the reduction program. I will send out an updated commentary shortly after the Fed announcement this afternoon and update everyone on what happened.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0637			1.0579
CAD/USD		0.9401			0.9452
EUR/USD		1.3748			1.3746
EUR/CAD		1.4626			1.4545
STG/CAD		1.7395			1.7207
AUD/CAD		0.947			0.9437
CAD/JPY		96.76			97.31
CAD/CHF		0.8353			0.8389
CAD/HKD		7.2824			7.323
CAD/CNY		5.7047			5.7361
CAD/MXN		12.1903			12.2425
Commodities
Gold		$1,232.00			$1,238.00
OIL		$97.23			$97.27
US DOLLAR INDEX
P.CLOSE		80.21			80.24
OPEN		80.27			80.29
US 10YR YIELD		2.85%			2.86%