GFX Morning FX Commentary February 20th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0100-1.0175

Today’s expected range for the Canadian Dollar against the Euro is 1.3540-1.3610

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

The US Dollar is stronger this morning as both the Euro and Sterling have dropped quite a bit. In the UK the release this morning of the last Bank of England meeting minutes were released and it showed that policy makers were in favour of expanding their Quantative Easing program which is a tool used to weaken the currency, GBP.USD dropped from a high 0f 1.5450 to trade at 1.5300. EURO.USD is also lower as it has traded to a low of 1.3370.

Before I left I had mentioned that a currency war was under way with central banks trying to influence the value of their currency. While I was away I read a headline that the G-20 met in Moscow and the Finance Ministers agreed that they would not engage in currency wars, well last night the Governor of the Bank of New Zealand announced that his central bank would intervene in the currency markets (sell massive amounts of New Zealand Dollars to the market) to prevent further strength in its currency, so much for no currency wars, so much for the G-20!!

The Canadian Dollar continues to trade between 1.0100 and 1.0200, while I was away the poor Canadian jobs report was the impetuous behind the Loonie getting weaker, it now is starting to look like the overall Canadian economy will start to slowdown. Short-term US Dollar buyers need to be ready if they see USD.CAD drop below 1.0100 at some point, US Dollar sellers should be leaving their orders around the 1.0200 level, I am not convinced that we will see USD.CAD above 1.0200 for an extended period over the short-term but given recent events it is a strong possibility that we could trade at that level.

Mrs. Smith and I are back after a great vacation, thankfully we were aboard a Princess cruise ship and not the Carnival one that was left floating around the Gulf of Mexico without power. It was very nice to get out of the winter even for a little while.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0137			1.0125
CAD/USD		0.9863			0.9875
EUR/USD		1.3389			1.334
EUR/CAD		1.3573			1.3509
STG/CAD		1.5518			1.5666
AUD/CAD		1.0464			1.0467
CAD/JPY		92.26			92.34
CAD/CHF		0.9088			0.9124
CAD/HKD		7.6281			7.636
CAD/CNY		6.1518			6.1643
CAD/MXN		12.5056			12.557
Commodities
Gold		$1,592			$1,614
OIL		$96.97			$95.40
Option Volatility
Canada
O/N		5.50%			5.29%
1 Week		6.59%			6.23%
1 Month		6.26%			6.03%