GFX Morning FX Commentary May 1st, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0025-1.0100

Today's expected range for the Canadian Dollar against the Euro is 1.3275-1.3450

Today's expected range for the Canadian Dollar against Sterling is 1.5640-1.5725

The US Dollar continues to weaken as global investors await the announcement this afternoon from the US Federal Reserve on interest rates. Trading activity was light in Europe as a lot of the centers are closed for the May Day holiday. The Greenback remains weak on the expectation that the Federal Reserve will keep buying about $85 Billion worth of bonds every month until at least the end of the year, just as we saw recently in Japan such programs have the effect of flooding the economy with cash, reducing interest rates and weakening the currency.

In the only other significant news overnight, Sterling got a bit of a bounce from better than expected manufacturing data, this should create good opportunities to sell Sterling for a bigger drop in the future.

The Canadian Dollar continues to get stronger against the US Dollar with USD.CAD dropping again last night. I am a bit surprised at the length of this recent move but with the trend emerging for a weaker US Dollar then we could see the Loonie continue to strengthen, my fear of course is a quick change in sentiment and then you will see a rapid rise for USD.CAD back above 1.0200

As mentioned  today we do get the US Federal Reserve announcement which will dominate trading, we are not expecting any changes to US interest rates or to the stimulus program though the Fed may announce future plans for exiting the stimulus program which would bring added volatility to the market. Up today we also get some secondary data out of the US including the ADP private employment report which is excepted to show a slowing in the rate of new jobs being created. We have definitely over the past few weeks seen a decline in the numbers coming out of the US so I won’t be that surprised if these numbers today are especially bad.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0054			1.0111
CAD/USD		0.9946			0.989
EUR/USD		1.3189			1.3072
EUR/CAD		1.3261			1.3221
STG/CAD		1.5649			1.5685
AUD/CAD		1.041			1.046
CAD/JPY		96.99			96.4
CAD/CHF		0.9234			0.9254
CAD/HKD		7.6986			7.6543
CAD/CNY		6.1289			6.0951
CAD/MXN		12.0785			12.0702
Commodities
Gold		$1,467.00			$1,472.00
OIL		$92.17			$94.39
US DOLLAR INDEX
P.CLOSE		81.75			82.16
OPEN		81.61			82.26