GFX Morning FX Commentary July 15th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0375-1.0450

Today’s expected range for the Canadian Dollar against the Euro is 1.3550-1.3625

Today’s expected range for the Canadian Dollar against Sterling is 1.5660-1.5740

The US Dollar is marginally stronger this morning in relatively quiet overnight markets, EURO.USD and GBP.USD are both lower as Chinese Growth rates came in as expected (grew 7.5% in the 2^nd quarter) but both still trade in familiar ranges. It looks now that the dive the US Dollar took on the Bernanke comments last week seems to be losing momentum as trading ranges have begun to narrow again. The Australian Dollar is stronger this morning (recovering a little from some very large weakness in recent weeks) on the back of the Chinese growth report, it highlights just how closely ties the Australian and Chinese economies are.

The Canadian Dollar is weaker this morning as it moves back and forth around the 1.0400 level, it looks like the Loonie will stay in these ranges as the market awaits the Bank of Canada policy announcement on Wednesday, this will be Stephen Poloz’s first announcement so the markets will be paying extra attention looking for any style changes or change in policy from the Carney era.

Up today we get the release of the US Retail Sales report so we could see some enhanced volatility around the report, a strong report will again increase speculation about tapering by the US Federal Reserve but for the most part we should see USD.CAD continue to trade around the 1.0400 level.

The big business news this morning is the announcement by Loblaw’s of their acquisition of Shoppers Drug Mart for 12.4B Canadian Dollars, most pundits seem to say that this was done to help combat the Wal-Mart effect. As this is a CAD for CAD deal I would not expected much if any ramifications for the Canadian Dollar market but if Loblaw’s has to unwind any US Holdings to generate cash for the transaction then we may see the Loonie rally a bit from time to time during the next few weeks, the impact will be minimal.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0528			1.0374
CAD/USD		0.9498			0.964
EUR/USD		1.3024			1.305
EUR/CAD		1.3579			1.3541
STG/CAD		1.5694			1.5684
AUD/CAD		1.059			0.9405
CAD/JPY		95.96			95.71
CAD/CHF		0.9128			0.9142
CAD/HKD		7.4104			7.4538
CAD/CNY		5.8863			5.9078
CAD/MXN					12.41
Commodities
Gold		$1,282.38			$1,274.00
OIL		$105.28			$104.72
US DOLLAR INDEX
P.CLOSE					82.91
OPEN		83.44			83.3
US 10YR YIELD		2.60%			2.57%