GFX Morning Commentary May 3rd, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0075-1.0150

Today’s expected range for the Canadian Dollar against the Euro is 1.3240-1.3320

Today’s expected range for the Canadian Dollar against Sterling is 1.5700-1.5770

The US Dollar is marginally weaker this morning as the world’s financial markets get ready for the US employment report this morning. We are expecting the creation of 145K jobs after the disappointing results last month where only 88K new jobs were created, if this number disappoints then I look for the US dollar to get hit quite hard and trade weaker.

Overnight the Euro jumped to trade at a high of 1.3140 against the Greenback, there was a lot of confusion in the market yesterday as after the interest rate cut one EU official came out and said that the EU would consider negative deposit rates as a way to get money moving in the economy, the Euro was immediately hit on this report but overnight the EU backed off this statement saying “markets over-interpreted a signal yesterday that the ECB would consider a deposit rate below zero”, and the Euro was able to recover some losses. Once again I highlight the fact that poor leadership in Europe continues to take the world’s financial markets down a very rocky road.

The Canadian Dollar is a bit weaker to start the day as the markets reacted to the announcement of the new Bank of Canada Governor Stephan Poloz. As long-time readers have seen me say many times financial markets do not like uncertainty so when Poloz the former CEO of the EDC was announced as the new head of the Bank of Canada the Loonie took a small hit, it was nothing material but currency traders will use any opportunity they can to create volatility, most market watcher predicted that Tiffany Macklem, the Deputy Governor would get the position so when Poloz was announced it came as a bit of a surprise. We will see over the next few months if Poloz will lead the Bank in a new direction, the next bank of Canada announcement on interest rates will be May 29^th but that will still be under the Carney influence, Poloz takes over effective June 3rd and his first policy announcement will be July 17^th.

Up today as I mentioned above trading today will depend on the results of the US Employment report (Canada reports its job numbers next Friday) if the number is strong look for USD.CAD to break higher and just the opposite if it is weak, either way we should see some enhance volatility.

Have a great weekend.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0108			1.0071
CAD/USD		0.9893			0.9929
EUR/USD		1.322			1.3179
EUR/CAD		1.3267			1.3273
STG/CAD		1.5732			1.5697
AUD/CAD		1.0377			1.0316
CAD/JPY		96.96			96.61
CAD/CHF		0.9217			0.9213
CAD/HKD		7.6541			7.683
CAD/CNY		6.0882			6.108
CAD/MXN		12.0523			12.1044
Commodities
Gold		$1,481.00			$1,454.00
OIL		$94.53			$91.50
US DOLLAR INDEX
P.CLOSE		82.28			81.64
OPEN		82.07			81.69