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%