GFX Morning Commentary January 11th, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9800-.9875

Today's expected range for the Canadian Dollar against the Euro is 1.3030-1.3100

Today's expected range for the Canadian Dollar against Sterling is 1.5835-1.5900

The US Dollar is marginally weaker against most currencies this morning with the lone exception being the Japanese Yen. Overnight EURO.USD reached a one week high as positive comments on the Euro economy from ECB Governor Draghi pushed the Euro higher, I guess all is well in Euroland and all their problems are in the rear view mirror now.

In Japan the new Government announced a new 116 billion USD (10.3 Trillion Yen) stimulus program which will be designed to end deflation and boost growth and reduce the value of the Yen. The Question will be is how far will the Yen weaken and how much affect will this program have on the economy.

In China inflation data came in much higher than expected for the month of December, if this trend continues then investors will be wary of further stimulus programs by the Chinese Government which wold push equities lower and the US Dollar higher, something to keep an eye on.

The Canadian dollar is marginally stronger against the USD this morning, all the action for the Loonie is happening against the Euro and Sterling where the Canadian Dollar fell over 150 points yesterday after the Draghi press conference yesterday, the Loonie is stuck in the mud against the US Dollar but flying around against other currencies

Up today we get some trade data out of the US and Canada which may get the attention of the currency markets, I would expect that we will see a further appreciation of the Canadian Dollar against the US Dollar but it will continue to be at a gradual pace, I still don’t look for nay big moves in USD.CAD.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9833			0.9851
CAD/USD		1.0167			1.0149
EUR/USD		1.3252			1.31
EUR/CAD		1.3033			1.2904
STG/CAD		1.5846			1.5821
AUD/CAD		1.0394			1.0421
CAD/JPY		90.05			89.19
CAD/CHF		0.932			0.9362
CAD/HKD		7.8613			7.8486
CAD/CNY		6.3181			6.3144
CAD/MXN		12.859			12.878
Commodities
Gold		$1,669			$1,664
OIL		$93.15			$94.35
Option Volatility
Canada
O/N		5.50%			5.60%
1 Week		5.40%			5.50%
1 Month		5.35%			5.45%