GFX Morning FX Commentary February 28th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0210-1.0280

Today’s expected range for the Canadian Dollar against the Euro is 1.3420-1.3490

Today’s expected range for the Canadian Dollar against Sterling is 1.5550-1.5620

The US Dollar is marginally stronger against the Euro this morning as the Dutch Government said that it would not meet the deficit reduction target mandated by the EU for its budget, I guess we have a new player to the table now in Europe. Please move over Spain, Ireland, Portugal and Greece, I wonder what the new acronym will be, PINGS maybe? Euro traded down to a low of 1.3100 overnight before recovering a bit this morning.

Sterling seems to be making a bit of a base at the moment as it is trying to fight back higher after this week’s rapid fall, GBP.USD is back trading above 1.5200 for the moment, I still favour a weaker Sterling over the short-term but the Pound may stabilize for the next few days. I did read a report that Lloyds Bank in the UK is predicting that GBP.USD will be at 1.4800 by the end of the year, I don’t place much faith in currency strategist predictions but Sterling should be lower in the coming months.

My comments yesterday that the longer we hung around 1.0300 without breaking above that level the more likelihood that USD.CAD would move back lower came to pass yesterday afternoon as the US Dollar traded lower all afternoon. We are back near the 1.0250 level so we will see if USD.CAD can continue this move lower or will it resume its attempt on 1.0300.

Up today we get the release of the US 4^th Quarter GDP report and markets will be watching to see if the US economy is meeting growth expectations. If the number falls below expectation then I think you will see equities take a big hit as the combination of a slowing economy and the budget cuts that are starting to take affect will get investors running for the hills. Today could be a very volatile day in the currency markets.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0234			1.0264
CAD/USD		0.9771			0.9745
EUR/USD		1.3114			1.31
EUR/CAD		1.3423			1.3448
STG/CAD		1.5553			1.5539
AUD/CAD		1.0505			1.0455
CAD/JPY		90			89.26
CAD/CHF		0.9087			0.906
CAD/HKD		7.5556			7.5365
CAD/CNY		6.0765			6.0639
CAD/MXN		12.4934			12.5214
Commodities
Gold		$1,590			$1,605
OIL		$92.66			$92.90
Option Volatility
Canada
O/N		8.50%			8.50%
1 Week		7.60%			7.94%
1 Month		6.98%			7.39%

GFX Mornign FX Commentary February 27th, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0225-1.0310

Today's expected range for the Canadian Dollar against the Euro is 1.3430-1.3500

Today's expected range for the Canadian Dollar against Sterling is 1.5520-1.5600

The US Dollar is marginally weaker this morning as the sell-off in the Euro has for the moment been stopped, the Italian Central Bank was able to sell more than enough bonds at auction today to calm investor fears for the short-term. It is now up to the Italian parties to see if they can form an effective government which will keep austerity in place and give Euro investors some confidence. The Euro was also helped higher by the Business Confidence report that showed an improvement, all in all a good day so far for the Euro.

The Canadian Dollar is still stuck in the 1.0200 to 1.0300 range, I keep thinking that it wants to break above 1.0300 but at the moment it is having a tough time, the longer we hang around here and not break above 1.0300 the more the chances that USD.CAD will fall back below 1.0200

Up today we get some secondary data out of the US but barring any surprises USD.CAD should have a relatively quiet day as it sets up for the release tomorrow of the US GDP report for the 4^th quarter.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0264			1.0263
CAD/USD		0.9745			0.9744
EUR/USD		1.31			1.3074
EUR/CAD		1.3448			1.342
STG/CAD		1.5539			1.5542
AUD/CAD		1.0455			1.0515
CAD/JPY		89.26			89.55
CAD/CHF		0.906			0.9059
CAD/HKD		7.5365			7.5303
CAD/CNY		6.0639			6.0682
CAD/MXN		12.5214			12.5134
Commodities
Gold		$1,605			$1,590
OIL		$92.90			$92.21
Option Volatility
Canada
O/N		8.50%			5.95%
1 Week		7.94%			7.40%
1 Month		7.39%			6.85%

 

GFX Morning FX Commentary February 25th, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0220-1.0300

Today's expected range for the Canadian Dollar against the Euro is 1.3410-1.3480

Today's expected range for the Canadian Dollar against Sterling is 1.5530-1.5600

The US Dollar opens the North American trading session much stronger against the Euro as yesterday afternoon saw the Euro drop as much as 1% against the Greenback (4% against the Yen) on the projected results of the Italian election. I am not quite sure how the Italian parliament works but there appears to be a stalemate with Bersani wining a slim victory in the house and Berlusconi able to block measures in the Senate. This has left European investors very nervous so Italian and Spanish Bond prices have risen, equity markets across Europe are all lower and the Euro has dropped significantly. The Euro has recovered a little this morning but the market still looks very nervous, if it gets this nervous about an Italian election result can you imagine what happens if Merkel gets thrown out later this year in Germany? I expect the Euro trading to be very volatile over the next few weeks.

With the strength in the US Dollar yesterday afternoon the Loonie traded weaker against the Greenback and looked set for a test of 1.0300 but last night it stemmed its losses and was able to pull back towards 1.0250. Given the weakness in the Euro the Loonie was able to  make some gains overnight with EURO.CAD dropping below 1.3500, given the current levels it might not be a bad time for some Euro buyers to take advantage of this weakness, EURO.CAD has been bouncing between 1.3400 and 1.3600 lately so these levels represent good value.

Up today markets will continue to watch developments in Italy as the election results continue to unfold but we also get the release of a lot of US data, including the Richmond Fed index and Consumer Confidence, with the overall strength in the USD and the weakness in the Euro I still favour a short-term test of 1.0300 but if we do get a correction it could be violent and we could see a quick drop below 1.0200 at some point. Regardless USD.CAD should see some enhanced volatility just like the rest of the FX markets.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0263			1.0227
CAD/USD		0.9744			0.9778
EUR/USD		1.3074			1.3276
EUR/CAD		1.342			1.3581
STG/CAD		1.5542			1.5485
AUD/CAD		1.0515			1.0537
CAD/JPY		89.55			91.63
CAD/CHF		0.9059			0.9043
CAD/HKD		7.5303			7.5623
CAD/CNY		6.0682			6.0921
CAD/MXN		12.5134
Commodities
Gold		$1,590			$1,592
OIL		$92.21			$94.24
Option Volatility
Canada
O/N		5.95%			6.05%
1 Week		7.40%			7.42%
1 Month		6.85%			6.92%

 

GFX Morning FX Commentary February 25th, 2013

Good Morning

Today's expected range for the Canadian Dollar against the US Dollar is 1.0180-1.0260

Today's expected range for the Canadian Dollar against the Euro is 1.3570-1.3650

Today's expected range for the Canadian Dollar against Sterling is 1.5100-1.5175

The US Dollar is mixed this morning as it is weaker against the Euro and stronger against Sterling. In the UK the pound has dropped to levels last seen in July 2010 against the Greenback and the Euro as Moody's announced a lowering of the UK credit rating to Aa1 from AAA after the markets closed on Friday. This move was not totally unexpected as the ongoing recession in the UK has left the Government running high deficits, we look for Sterling to trade with a weak bias for the foreseeable future.

In Europe the Euro is trading stronger against the US Dollar as the Italian Democratic party is expected to be able to form a coalition government and keep the austerity measures in place after the results of today's election. If on the other hand Berlusconi’s party fares better than expected then the Euro should trade weaker over the immediate short-term. With the overnight strength in the Euro, EURO.CAD has jumped much higher over the weekend and looks like it wants to break back above 1.3600.

The Canadian Dollar continues to trade weaker against the US Dollar and is now firmly entrenched above the 1.0200 level but only traded in a narrow overnight range. Given all the hoopla surrounding the Euro and Sterling at the moment I would not expect much of a spotlight to be on the Loonie this week so I am not looking for any dramatic trading ranges.

Up today we do get a lot of secondary data out of the US today so I won’t be surprised if we do get some enhanced volatility but it may be more EURO.CAD moving than USD.CAD. For the short-term it still looks like USD.CAD has room to go higher but we may yet see some Canadian Dollar strength over the medium term.

Mike

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0227			1.0188
CAD/USD		0.9778			0.9812
EUR/USD		1.3276			1.3172
EUR/CAD		1.3581			1.3423
STG/CAD		1.5485			1.5558
AUD/CAD		1.0537			1.0524
CAD/JPY		91.63			91.45
CAD/CHF		0.9043			0.9143
CAD/HKD		7.5623			7.59
CAD/CNY		6.0921			6.1214
CAD/MXN					12.5093
Commodities
Gold		$1,592			$1,579
OIL		$94.24			$92.98
Option Volatility
Canada
O/N		6.05%			6.00%
1 Week		7.42%			7.40%
1 Month		6.92%			6.90%

 

 

GFX Morning FX Commentary February 22nd, 2013

Good Morning

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0150-1.0235

Today’s expected range for the Canadian Dollar against the Euro is 1.3410-1.3500

Today’s expected range for the Canadian Dollar against Sterling is 1.5580-1.5675

The US Dollar was marginally weaker overnight as equities and the Euro rose slightly on better economic news out of the Euro-Zone. German business confidence rose to a 10 month high in Germany which helped push EURO.USD to trade at 1.3235 before dropping back. Stocks also picked up some strength on the speech by US Federal Reserve committee member Bullard stating global uncertainty remains high and the Fed policy will stay the course, the back tracking from the Fed announcement earlier this week has already started.

The Canadian Dollar remains weak and looks set to test the 1.0200 level, I am a bit surprised at this as both the Australian Dollar and the New Zealand Dollar moved higher last night, I would expect the Loonie to play catch up at some point so barring any surprises today I think I would expect USD.CAD to move lower at some point today. We do get the release of the Canadian CPI report for January and the Retail Sales report for December, it these numbers are really bad then we may see the Loonie take another hit, but all things being equal, I would expect a small move lower for USD.CAD at some point today.

Have a great weekend

Mike

 

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0188			1.0185
CAD/USD		0.9812			0.9815
EUR/USD		1.3172			1.3185
EUR/CAD		1.3423			1.3431
STG/CAD		1.5558			1.5537
AUD/CAD		1.0524			1.0447
CAD/JPY		91.45			91.18
CAD/CHF		0.9143			0.9145
CAD/HKD		7.59			7.5929
CAD/CNY		6.1214			6.1235
CAD/MXN		12.5093			12.5715
Commodities
Gold		$1,579			$1,572
OIL		$92.98			$94.05
Option Volatility
Canada
O/N		6.00%			6.50%
1 Week		7.40%			7.45%
1 Month		6.90%			6.92%