GFX Morning Commentary January 25th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0000-1.0075

Today’s expected range for the Canadian Dollar against the Euro is 1.3500-1.3600

Today’s expected range for the Canadian Dollar against Sterling is 1.5870-1.5970

The US Dollar is marginally weaker as the Euro continues its current run and currency markets are still being dominated by Yen trading. EURO.USD rose to trade as 1.3460 as German Business Confidence rose for a third month in January and the ECB announced that sovereign borrows are paying back more money that was loaned out quicker than expected.

Sterling is struggling this morning as the UK GDP report showed that the economy shrank in the 4^th quarter by 0.3%, it now appears certain the UK will fall into a triple dip recession, this economy just cannot get any traction.

The Canadian Dollar had a very quiet overnight session, in fact it hardly traded at all but the Loonie still trades with a weak bias this morning. With the strength of the Euro the Loonie is under immense pressure at the moment, just last week EURO.CAD was at 1.3100 where we recommended Euro buyers to try and buy some, today EURO.CAD has reached a high of 1.3525 which is a huge jump. Compared to the Euro the Loonie is doing relatively well against the USD, I think when we see a turnaround in EURO.CAD we will start to see USD.CAD move back down.

Up today we do have the Canadian CPI report where we are expecting a monthly drop of 0.2% in December. I don’t think that the currency market will pay that much attention to the inflation rate as it has been benign for a while now, with US equity markets pointing lower today I look for USD.CAD to try and break higher but it may have a tough time with lots of US Dollar sellers around.

 

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0041			1.0006
CAD/USD		0.9959			0.9994
EUR/USD		1.3442			1.3325
EUR/CAD		1.3486			1.3335
STG/CAD		1.5831			1.584
AUD/CAD		1.0489			1.0504
CAD/JPY		0.9048			89.27
CAD/CHF		0.9167			0.9268
CAD/HKD		7.7073			7.7276
CAD/CNY		6.1883			6.2142
CAD/MXN					12.6894
Commodities
Gold		$1,665.94			$1,677
OIL		$96.32			$95.44
Option Volatility
Canada
O/N		6.45%			7.50%
1 Week		7.15%			6.15%
1 Month		6.18%			5.90%