GFX Morning FX Commentary June 6th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0290-1.0370

Today’s expected range for the Canadian Dollar against the Euro is 1.3510-1.3600

Today’s expected range for the Canadian Dollar against Sterling is 1.5920-1.6000

The US Dollar is marginally weaker this morning as the Euro rose to a four week high against the Greenback, investors are expecting that ECB Governor Draghi will reassure investors that the EU economy will recover in the 2^nd half of the year in his press conference this morning. In other interest rate news the Bank of England kept its key interest rate at 0.5% and did not announce any changes to their stimulus  program. This was as expected and was BOE Governor King’s last meeting, former Bank of Canada Governor Mark Carney takes over July 1^st. The minutes of this meeting will be released in two weeks.

As I write the ECB has announced that they are keeping interest rates at 0.5%, more importantly for investors will be the Draghi press conference at 08:30, we could see some enhanced volatility around that report.

The Canadian Dollar had a strong night last night as it moved back towards the bottom of recent ranges, it seemed to diverge from other commodity currencies as both the Aussie and New Zealand Dollars were again weaker last night, AUD.USD has not been this low since 2011. One explanation could be that speculators with short Canadian Dollar positions are squaring up ahead of our Employment report tomorrow and that is giving the Loonie a bit of a temporary boost.

In addition to the ECB press conference we also the US initial jobless claims report and the Canadian Ivey Purchasing Managers index, while secondary data I think the markets are a bit nervous at the moment and either of these could move the currency market, however most market watchers will be paying attention to what Draghi has to say. If we see a drop in USD.CAD below 1.0300 this morning I think it is a good strategy for US Dollar buyers to make some purchases, we saw just how fast the US Dollar can rebound earlier this week.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.032			1.035
CAD/USD		0.964			0.9662
EUR/USD		1.3112			1.3065
EUR/CAD		1.3535			1.3524
STG/CAD		1.595			1.5893
AUD/CAD		0.9811			0.9898
CAD/JPY		95.92			96.21
CAD/CHF		0.912			0.9147
CAD/HKD		7.499			7.4768
CAD/CNY		5.9457			5.9174
CAD/MXN		12.4567			12.311
Commodities
Gold		$1,404.00			$1,398.00
OIL		$94.23			$93.66
US DOLLAR INDEX
P.CLOSE		82.57			82.78
OPEN		82.43			82.78