GFX Morning Commentary March 19th, 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 1.3220-1.3300

Today's expected range for the Canadian Dollar against Sterling is 1.5440-1.5520

The US Dollar is marginally higher this morning as the Cypriot mess continues to weigh on the Euro and the global financial markets. There is still much confusion coming out of Cyprus as regards to this plan to tax deposit accounts, but right now there does not appear to be a 2nd option being considered by the EU. A vote was scheduled for the Cypriot parliament on the plan but that may have again been delayed, Cypriot banks have been ordered closed until Thursday where a run on cash deposits is expected to occur.  What i find interesting is that the EU is expecting deposit holders to bail out the bondholders of the Cypriot banks, normally in a bankruptcy the bondholders are left holding the bag, this move creates a whole new precedent which is very worrying, until this situation settles itself the Euro should remain weak.

The Canadian Dollar had a quiet night against the US dollar but did gain a little against the Euro, I am not expecting much movement for the Loonie against the US Dollar today as the currency markets are fully focused on the events unfolding in Europe. We do get the release of Canadian Wholesale Sales today but it should not have much of an impact on the Loonie, the Canadian market will await the new federal budget to be released on Thursday where we can get new figures on the Canadian economy and the size of the Canadian deficit, rest assured that there is no way that Flaherty will hit his deficit reduction targets that he told us where not going to be a problem in his last budget.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0229			1.0237
CAD/USD		0.9776			0.976
EUR/USD		1.2931			1.295
EUR/CAD		1.3233			1.3261
STG/CAD		1.547			1.5489
AUD/CAD		1.0607			1.0625
CAD/JPY		93.09			92.75
CAD/CHF		0.9233			0.922
CAD/HKD		7.5635			7.56
CAD/CNY		6.0749			6.0922
CAD/MXN		12.1463			6.0717
Commodities
Gold		$1,602			$1,604
OIL		$93.77			$93.38
Option Volatility
Canada
O/N		6.00%			6.05%
1 Week		6.10%			6.31%
1 Month		6.40%			6.03%