GFX Morning FX Commentary January 18th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9875-.9950

Today’s expected range for the Canadian Dollar against the Euro is 1.3200-1.3275

Today’s expected range for the Canadian Dollar against Sterling is 1.5770-1.5850

The US Dollar is stronger this morning as Euro is weaker on investor concerns about the growth projections for the EU this coming year. The Euro had reached an overnight high of 1.3390 against the Greenback before dropping to trade at 1.3340 this morning, the big currency of interest last night was Sterling which reached a low of 1.5930 against the US Dollar. In the UK the Pound was down for a 6^th straight day as the December Retail Sales reports showed an unexpected decline in sales, this coupled with investor fears of the UK pulling out of the Euro have weighed on Sterling over the course of this week.

Countries playing with the value of the currencies to improve their export market continues, there are rumours in the market that the Swiss National Bank (Swiss Central bank) will raise the floor that they have set for the Franc to 1.2500 against the Euro. This means that if the markets were to push EURO.CHF below 1.2500 the SNB would enter the market to purchase massive amounts of Euro to stop the Swiss Franc from getting stronger. Currently the floor they have set for EURO.CHF is set at 1.2000 and with EURO.CHF trading 1.2450 this is not much of a factor, but if EURO.CHF rises above 1.2500 in the coming weeks and they do raise the floor then we will see lots of Euro activity taking place.

The Canadian Dollar finally broke out of its funk last night and had some overnight trading activity. As we expected, with the strength in the US Dollar last night USD.CAD moved higher and looks set to test the .9900 level today in what seemed to be a very active evening for the Loonie. I think it was a case of some large hedge fund investors sold off some Canadian dollars in a profit taking move, it will be interesting to see if USD.CAD will continue to climb higher today.

Just a quick note that Monday is a holiday in the US and the Fed wire system will be closed, if you need us to wire out some US Dollars then you will need to do so today, you won’t be able to send any on Monday.

 

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9904			0.9867
CAD/USD		1.0096			1.0133
EUR/USD		1.3347			1.3369
EUR/CAD		1.3221			1.3194
STG/CAD		1.5785			1.5823
AUD/CAD		1.0407			1.0378
CAD/JPY		90.66			90.6
CAD/CHF		0.9411			0.9424
CAD/HKD		7.807			7.8351
CAD/CNY		6.2758			6.2954
CAD/MXN		12.7365			12.7739
Commodities
Gold		$1,690			$1,681
OIL		$95.29			$94.62
Option Volatility
Canada
O/N		5.81%			7.14%
1 Week		6.23%			5.69%
1 Month		5.58%			5.38%