GFX Morning FX Commentary, June 27th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0410-1.0480

Today’s expected range for the Canadian Dollar against the Euro is 1.3600-1.3675

Today’s expected range for the Canadian Dollar against Sterling is 1.5950-1.6025

The US Dollar is marginally weaker this morning as the markets slowly digest the poor US GDP report from yesterday. With the US economy growing at a slower rate than anticipated investors may have jumped the gun in thinking that the US Federal Reserve will start to taper their stimulus program sooner than later, with poor growth there is no way that US unemployment will get below the magic 7.0% unemployment level needed for the Fed to start withdrawing stimulus in the near future. Ever so slowly we have seen the stock markets move higher and the US Dollar give back some gains.

Sterling dropped to its lowest level in a week as the UK GDP report came in lower than expected, once again we see the UK report poor numbers just as the currency had started to gain some momentum.

The Canadian Dollar had a narrow overnight trading range and now looks like it is slowly starting to recover. If Canada can report relatively strong GDP numbers tomorrow then I will not be surprised to see USD.CAD move back below 1.0400. I am also beginning to see a bit of a trading pattern emerge for the Canadian Dollar, when USD.CAD first jumped above parity a while back it went to a high of 1.0200 and then it settled in around 1.0050 for a long time, the next time it really weakened we saw USD.CAD jump to 1.0400 before slowly pulling back to 1.0150 where it spent a long time trading back and forth, this time we have seen USD.CAD get above 1.0500, so if the trading pattern holds in we could see USD.CAD slowly grind back to 1.0250/1.0300, sit there for a while before the next possible bout of weakness, just an interesting observation for what it is worth.

Up today we get some secondary US data including Personal Expenditures, if these numbers disappoint and follow up on the poor GDP data from yesterday we may see USD.CAD pullback quickly to the 1.0400 level. I am still watching US interest rates and the 10 year bond is still trading quite high, if that drops then USD.CAD will surely fallback.

There will not be a commentary tomorrow as I am going to get an early jump on the holiday weekend, have a safe and happy Canada Day. Just a reminder that the International currency markets will be open on Monday and can be quite volatile so make sure you have your orders in ahead of the weekend.

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0453			1.0487
CAD/USD		0.9566			0.9535
EUR/USD		1.302			1.3015
EUR/CAD		1.3613			1.3647
STG/CAD		1.5971			1.6105
AUD/CAD		0.9714			0.9727
CAD/JPY		93.82			93.04
CAD/CHF		0.9045			0.8974
CAD/HKD		7.399			7.379
CAD/CNY		5.8796			5.8576
CAD/MXN		12.5338			12.6506
Commodities
Gold		$1,228.00			$1,227.00
OIL		$95.68			$94.84
US DOLLAR INDEX
P.CLOSE		83.21			82.79
OPEN		83.18			83.08
US 10YR YIELD		2.54%			2.59%

 

 

 

 

GFX Afternoon Update June 26 2013

The US released their first quarter GDP report which showed a growth rate of 1.8% which came in well  below expectations of 2.4%. With a poor GDP report stock markets pushed higher and the US Dollar dropped off on the expectation that the Fed may not be able to pull stimulus as quickly as they had first thought.

The Canadian Dollar has remained range bound for the morning unable to turn the weaker US GDP numbers into sustainable gains, while other commodity currencies like the Aussie have fallen the Canadian Dollar remains consistent in the same range. 

Up tonight get CPI and unemployment out of Japan and Unemployment out of Germany, there will be lots of events to bring some volatility to the market tonight. Barring any surprises we look for USD.CAD to remain range bound through the night as the market get ready for Canadian GDP on Friday, but if any of these reports show a much worsening global economic picture we could find USD.CAD quite a bit higher tomorrow night.

Have a great evening

Yonah

GFX Morning FX Commentary June 26th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0440-1.0520

Today’s expected range for the Canadian Dollar against the Euro is 1.3630-1.3700

Today’s expected range for the Canadian Dollar against Sterling is 1.6080-1.6150

The US Dollar is stronger this morning as comments From ECB Governor Draghi that interest rates will remain low prompted a sell-off in both the EURO and Sterling, Sterling was also hit hard on a UK report that showed the British economy is vulnerable to the uncertain outlook for the Euro-Zone economy. It seems every time that there is some good news coming out of Euro-Land or the UK the next day uncertainty rears its head and the currencies get hit.

The Canadian Dollar seems to have settled in trading back and forth around the 1.0500 level, the Loonie was quite strong last night when you consider that Gold was off by 3.5% and other commodities were also lower but not as much as Gold. With equities recovering a little and talk calming down about the Federal Reserve reducing stimulus the currency is starting to settle into its new short-term range. What I will be paying close attention to over the next few weeks is the interest rates on 10-year US Treasury Bond, over the past few sessions the yield on these bonds has jumped to 2.59% which is the highest we have seen in a long time, if these rates do not come back down over the next few sessions a demand for US Dollars might be created as global investors will be looking for the higher yield on their investments, such a high interest rate could push USD.CAD higher over the next few weeks.

Up today we get the USD GDP report for the first quarter, if the number continues to point to a recovery we should see a boost in the stock market and a possible push back to 1.0500  for USD.CAD. Other than this release the day should be quiet as Canadian Dollar traders get ready for the Canadian GDP report due out Friday morning.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0487			1.0473
CAD/USD		0.9535			0.9548
EUR/USD		1.3015			1.3123
EUR/CAD		1.3647			1.3741
STG/CAD		1.6105			1.6186
AUD/CAD		0.9727			0.9693
CAD/JPY		93.04			93.03
CAD/CHF		0.8974			0.8925
CAD/HKD		7.379			7.3867
CAD/CNY		5.8576			5.8645
CAD/MXN		12.6506			12.5945
Commodities
Gold		$1,227.00			$1,283.00
OIL		$94.84			$95.82
US DOLLAR INDEX
P.CLOSE		82.79			82.64
OPEN		83.08			82.55
US 10YR YIELD		2.59%			2.53%

 

 

GFX Afternoon Update June 25 2013

There were a few pieces of data released in the US this morning with the US durable goods orders report coming in better than expected at 3.6%. US consumer confidence was well above estimates at 81.4 and new home sales were above estimates as well at 476,500. While the Case-Shiller home price index is not viewed as a major release it posted its largest growth in seven years with a year over year growth of 12.1% indicating a very strong housing market. With the Fed looking to begin cutting back the stimulus  once positive data is available,  this better than expected housing data may give the Fed a justification to do just that sooner than later. 

These strong reports have helped to push the US Dollar higher against most currencies, equities are also moving higher so a strong day for markets south of the border. 

Have a good evening

Yonah

GFX Morning Commentary June 25th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0430-1.0530

Today’s expected range for the Canadian Dollar against the Euro is 1.3720-1.3800

Today’s expected range for the Canadian Dollar against Sterling is 1.6150-16230

The US Dollar is marginally weaker in quiet overnight trading conditions, most markets calmed down last night as they took a deep breath from the extreme volatility that we have seen over the past few days.  European equity markets were all slightly higher and North American markets are looking positive to start the day so we should see a bit of a recovery in the currency market today. The US Dollar for the most part traded in narrow range last night, EURO.USD moved a little higher but for the most part was very quiet.

The Canadian Dollar continued to pullback some strength as USD.CAD was not able to hold onto it jump above 1.0500. As long as we see equities move back higher I think that the Canadian Dollar can slowly get stronger, but the risk still remains that uncertainty will once again hit the markets and USD.CAD will quickly jump as we saw last week. US Dollar buyers need to make sure that they do not risk waiting too long for a big pullback before locking in some of their purchases.

Up today we get a slew of US secondary economic activity so we may see some volatility around their release but for the most part if equities have a strong day then we should see USD.CAD move lower.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0473			1.0505
CAD/USD		0.9548			0.9519
EUR/USD		1.3123			1.3107
EUR/CAD		1.3741			1.3772
STG/CAD		1.6186			1.6128
AUD/CAD		0.9693			0.9658
CAD/JPY		93.03			93.24
CAD/CHF		0.8925			0.8893
CAD/HKD		7.3867			7.3626
CAD/CNY		5.8645			5.8463
CAD/MXN		12.5945			12.7656
Commodities
Gold		$1,283.00			$1,281.00
OIL		$95.82			$93.47
US DOLLAR INDEX
P.CLOSE		82.64			82.61
OPEN		82.55			82.78
US 10YR YIELD		2.53%			2.58%

 

 

GFX Morning Commentary June 24th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0480-1.0580

Today’s expected range for the Canadian Dollar against the Euro is 1.3750-1.3850

Today’s expected range for the Canadian Dollar against Sterling is 1.6150-1.6250

The US Dollar continues to soar on the expectation of the US Federal Reserve starting to taper off their stimulus program, the Dollar also benefited from report that the Chinese financial system may be facing a cash crunch which would in turn drive up borrowing costs and slow growth in that country. It is clear that global investors are getting out of stock markets and putting their money into cash and US treasuries, stock markets around the world are getting hammered and it looks like today is no exception, the Dow Jones is showing that it will open down over 100 points and in the Bond market US interest rates continue to rise putting additional pressure on the US Dollar.

The Canadian Dollar continues to weaken off in dramatic fashion, just a few weeks back I was writing that the Loonie was stuck in a range and volatility had disappeared from the market, that certainly is not the case anymore as USD.CAD moves ahead at a rapid pace. The Loonie is also much weaker against Euro and Sterling as both of those are currencies are not dropping as much as the Loonie is.

With no economic data out today all markets will be focused on equities to see if they recover, if they get hit hard throughout the day then look for USD.CAD to move higher, if we get a bit of a recovery off of the opening levels then we could see USD.CAD move back towards 1.0500. We do have some US Federal reserve committee members speaking around the world today, given the recent Fed actions their comments may be scrutinized a bit more by the Financial markets.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0505			1.0378
CAD/USD		0.9519			0.9635
EUR/USD		1.3107			1.3217
EUR/CAD		1.3772			1.3718
STG/CAD		1.6128			1.607
AUD/CAD		0.9658			0.9576
CAD/JPY		93.24			0.9402
CAD/CHF		0.8893			0.894
CAD/HKD		7.3626			7.4513
CAD/CNY		5.8463			5.908
CAD/MXN		12.7656			12.7999
Commodities
Gold		$1,281.00			$1,293.00
OIL		$93.47			$95.42
US DOLLAR INDEX
P.CLOSE		82.61			81.98
OPEN		82.78			82.03
US 10YR YIELD		2.58%			2.40%

 

 

 

 

GFX Morning FX Commentary June 21st, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0325-1.0425

Today’s expected range for the Canadian Dollar against the Euro is 1.3680-1.3750

Today’s expected range for the Canadian Dollar against Sterling is 1.6030-1.6100

The US Dollar is for the most part unchanged this morning against most currencies as the financial markets caught their breath after the carnage from the last two days. Yesterday saw equity markets in North America wipe out their gains from April and May and the US dollar rallied dramatically right across the board as investors fled the equity markets and bought US Treasuries. Of interest, the 10 Year US Treasury Bond has gained over 50 basis points in yield in the past month,  if you were to buy a 10 year bond today you would get 2.4% in interest over the 10 years, last month you would have received only 1.9%, that is a huge increase in US interest rates so borrowing costs in the US are clearly starting to rise, a sign that the market thinks the US recovery is in hand.

The Canadian Dollar had a quiet night as it stabilized after the big move for USD.CAD yesterday, normally after such a dramatic move I would expect some kind of a pullback so I would not be surprised if we see USD.CAD fall back today towards 1.0350 as it calms down and regroups for its next move.

Up today we do get Canadian Inflation and Retail Sales data so we may have a little volatility early on but I do get the sense that the currency market is focused on the events of the last few days and as long as there are no big surprises in the data we should have a relatively calm day. Keep an eye on North American Equity markets, right now it looks like the Dow Jones and the TSX will open higher, as long as they stay the course then USD.CAD has the best chance to recover a bit and we will see the Loonie rally, if they fall off then USD.CAD could test 1.0400 level again.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0378			1.0337
CAD/USD		0.9635			0.9674
EUR/USD		1.3217			1.3201
EUR/CAD		1.3718			1.3649
STG/CAD		1.607			1.5985
AUD/CAD		0.9576			0.9527
CAD/JPY		0.9402			0.9453
CAD/CHF		0.894			0.9015
CAD/HKD		7.4513			7.4777
CAD/CNY		5.908			5.9293
CAD/MXN		12.7999			12.8907
Commodities
Gold		$1,293.00			$1,303.00
OIL		$95.42			$96.69
US DOLLAR INDEX
P.CLOSE		81.98			81.45
OPEN		82.03			82.09
US 10YR YIELD		2.40%