GFX Morning FX Commentary March 20th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0225-1.0280

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 1.5480-1.5550

Welcome to the first day of Spring ;)

The US Dollar is marginally weaker this morning as the Cypriot Government defeated the plan to tax deposit accounts and the EU said they would provide temporary emergency funding so the banking system remains solvent until they come up with a more permanent plan. Finally the EU has seen some sense that the proposed tax had massive repercussions for the rest of Europe and they have abandoned the plan. The Pound had a small gain as the minutes of the most recent Bank of England were released and it showed that the members voted 6-3 to keep the stimulus program in place.

As I write this an announcement has hit the wires that one of the big Cypriot banks has been sold to a group of Russian investors. Nice to know that the Russian Mob will have their own national bank in Cyprus, that just gives me a warm and fuzzy feeling allover.

Today’s trading will be dominated by the Federal Reserve interest rate announcement  on interest rates and Fed Chairman’s Ben Bernanke comments on the stimulus program and the overall US economy,  We expect that the interest rates will remain at 0.25% and the QE program will continue as planned. If our view is correct then we should see the equity markets and US dollar jump a bit today.

The Canadian Dollar did get a bit stronger against the USD but had another very quiet night as it settles in for the US Fed announcement this afternoon. The Canadian Dollar has really taken a back stage on the world’s currency markets at the moment, USD.CAD is squarely focused on the US Dollar and the Loonie just reacts to what is happening with the Greenback. The Loonie may move into the forefront on Thursday with the release of the Federal budget especially if Flaherty puts on a dour face and says he is way off on his deficit predictions.

If we get a lot of movement after the Federal Reserve announcement I will send out a currency alert.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0243			1.0229
CAD/USD		0.9763			0.9776
EUR/USD		1.2914			1.2931
EUR/CAD		1.3237			1.3233
STG/CAD		1.5508			1.547
AUD/CAD		1.0642			1.0607
CAD/JPY		93.07			93.09
CAD/CHF		0.9224			0.9233
CAD/HKD		7.5553			7.5635
CAD/CNY		6.0615			6.0749
CAD/MXN		12.1037			12.1463
Commodities
Gold		$1,610			$1,602
OIL		$92.81			$93.77
Option Volatility
Canada
O/N		6.80%			6.00%
1 Week		6.77%			6.10%
1 Month		6.37%			6.40%