GFX Morning Commentary February 1st, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9960-1.0040

Today’s expected range for the Canadian Dollar against the Euro is 1.3620-1.3700

Today’s expected range for the Canadian Dollar against Sterling is 1.5820-1.5900

The US Dollar is mixed this morning as once again the Euro has jumped higher, the Yen has not been this weak against the Euro since April of 2010. The Greenback and Euro are both  stronger against the Pound,  this as a UK manufacturing report came in weaker than expected and pushed Sterling to a 14-month low against the Euro, basically investment flows continue to flow into Europe which continues to push the Euro higher. I am a bit surprised at the strength of the Euro but there is no point in standing in front of a runaway train at the moment. At some point it will slowdown but it may have a bit of run left in it just yet.

The Canadian Dollar had the rally that we were looking for yesterday with USD.CAD breaking back below the 1.000 level, the question now is will it continue to recover or will it settle in a new range and continue to trade back and forth around par? My feeling is unless we get a major development the Loonie will settle down to trade around par for a few days at least or until the next big currency market development.

Up today currency trading will be dominated by the US Employment report where we are expecting 150K jobs to have been created in the US in January, the unemployment rate is expected to remain at 7.8%. Currency traders will look for confirmation that the economy in the US is still creating jobs, if the number drops below expectation we could see some fireworks this morning with USD.CAD jumping back towards 1.0050. We also get some US manufacturing data later in the morning so today could be a very volatile day, make sure you get your orders in to take advantage of any moves.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9992			1.0024
CAD/USD		1.0008			0.9976
EUR/USD		1.365			1.3548
EUR/CAD		1.3642			1.3584
STG/CAD		1.5827			1.5829
AUD/CAD		1.0362			1.041
CAD/JPY		92.13			90.76
CAD/CHF		0.9043			90.9
CAD/HKD		7.74			7.7164
CAD/CNY		6.227			6.2
CAD/MXN		12.7349
Commodities
Gold		$1,665			$1,675
OIL		$97.19			$97.75
Option Volatility
Canada
O/N		6.27%			10.36%
1 Week		6.81%			6.84%
1 Month		6.22%			6.28%