GFX Morning Commentary August 30th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0480-1.0560

Today’s expected range for the Canadian Dollar against the Euro is 1.3910-1.3980

Today’s expected range for the Canadian Dollar against Sterling is 1.6300-1.6380

The US Dollar is unchanged from yesterday’s close in very quiet trading conditions. I think the vote by the British Parliament not to join the attacks against Syria have put financial markets as they wait to see what will happen next, everything I read seems to indicate that the US will go it alone but that is far from certain. After the vote the price of oil (which had been on strong run) fell back a bit and the emerging market currencies that had been getting creamed pulled back some strength.

The Canadian Dollar looks like it has settled into a new range around the 1.0500 level, with the emphasis I think still on the US Dollar going higher over the medium term but for now USD.CAD should be contained in narrow ranges. Up today we do get the Canadian 2^nd Quarter GDP report where we are expecting an annualized growth rate of 1.6% which will pale in comparison to the 2.5% growth rate that was reported in the US yesterday. The Canadian number is most likely being influenced by the Calgary Floods as it was rumored that the floods could take 0.5% out of our GDP.  A very poor Canadian number could easily push USD.CAD back up towards the 1.0500 level. Anything around expectation should leave the markets where they are and with North American markets in long-weekend mode the afternoon should be very quiet.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.053			1.0502
CAD/USD		0.9497			0.9522
EUR/USD		1.3237			1.342
EUR/CAD		1.3941			1.392
STG/CAD		1.631			1.6285
AUD/CAD		0.94			0.9381
CAD/JPY		93.23			93.42
CAD/CHF		0.8831			0.8842
CAD/HKD		7.3598			7.3786
CAD/CNY		5.8122			5.825
CAD/MXN					12.6964
Commodities
Gold		$1,395.00			$1,412.00
OIL		$107.77			$109.53
US DOLLAR INDEX
P.CLOSE		82.01			81.44
OPEN		82.03			81.9
US 10YR YIELD		2.75%			2.78%

 

 

 

GFX Morning FX Commentary August 28th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0475-1.0550

Today’s expected range for the Canadian Dollar against the Euro is 1.4000-1.4070

Today’s expected range for the Canadian Dollar against Sterling is 1.6220-1.6290

The US Dollar is marginally stronger this morning in quiet FX trading markets. Much the same as yesterday FX markets are focusing on the melt-down in emerging markets, this morning the Indian Rupee hit a 20 year low against the US Dollar, the Turkish Lira hit a record low and the South African Rand fell to its weakest level since 2009, it is a clear trend to move money out of emerging market countries and into more stable currencies like the Euro and US Dollar.

Sterling was also a bit lower as BOE Governor Carney will be talking about the economy today, it is expected that he will emphasis the need for low interest rate for some time to come, Sterling should continue to trade with a weak bias for the short-term.

The Canadian Dollar is a bit weaker from it close yesterday afternoon, it did stage a small rally yesterday as the price of oil seemed to give the commodity currencies a bit of a boost but it has been some time since the Loonie was strongly correlated to the price of oil, I would not look for big gains in the Loonie if Oil suddenly start to jump in price.

Up today we get some housing data out of the US so for the most part it should be a quiet day. Talks of Western military intervention in Syria will dominate the geo-political arena today, if there are clear signs of the West starting a bombing campaign then look for the US Dollar to rally as investors run to the safe haven of US treasury bills.

I will be out of the office today and Thursday but back in on Friday, there will not be  a commentary tomorrow morning, if you want to know anything that happened in the overnight market just drop Randy a note. rdavis@gfxpartners.ca

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0497			1.0528
CAD/USD		0.9526			0.9498
EUR/USD		1.3352			1.3345
EUR/CAD		1.402			1.4054
STG/CAD		1.6242			1.6338
AUD/CAD		0.9366			0.9424
CAD/JPY		92.66			92.82
CAD/CHF		0.8757			0.8746
CAD/HKD		7.3814			7.3455
CAD/CNY		5.8261			5.8115
CAD/MXN		12.6972			12.6839
Commodities
Gold		$1,424.00			$1,412.00
OIL		$109.57			$106.90
US DOLLAR INDEX
P.CLOSE		81.18			81.42
OPEN		81.44			81.5
US 10YR YIELD		2.72%			2.80%

 

 

 

 

GFX Morning FX Commentary, August 27th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0480-1.0560

Today’s expected range for the Canadian Dollar against the Euro is 1.4022-1.4100

Today’s expected range for the Canadian Dollar against Sterling is 1.5310-1.5400

The US Dollar is marginally stronger against the Euro and Sterling this morning and unchanged against the Canadian Dollar. In Europe the German IFO (a measure of economic performance) report came in and showed a little better than expected. Economic reports out of Germany have been improving lately so this may give a boost to Chancellor Merkel’s campaign for re-election, I have yet to see any polls in the media but if her party were to lose the election September 22^nd then I think you will see the Euro get smashed.

The Euro continues to benefit from the meltdown in emerging markets as the Indian Rupee and the Indonesian Rupiah continue to get hit the hardest of all emerging markets. Also getting hit are the Brazilian Real and the Mexican Peso with both trading weaker over the past few weeks. As I mention earlier none of this flow of money is coming to Canada for investment purposes, most of it seems to be supporting the Euro at the moment.

With the threat of military intervention in Syria escalating, stocks have started to give up some gains in Europe and Asia. I have said it many times before, financial markets do not like uncertainty and with Syria there are lots of questions to be answered, first and foremost is what will Russia and Iran do if the West intervenes in Syria? Look for stocks to stay unsettled if the risk of military intervention increases.

Up today we get the release of US Consumer Confidence report for August, the last few economic out of the uS releases have been poor, if this data is weak you could see the US Dollar get hit again. I still favour a move higher for USD.CAD but for the moment but we should be contained to tight intraday ranges.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0528			1.0518
CAD/USD		0.9498			0.9507
EUR/USD		1.3345			1.3368
EUR/CAD		1.4054			1.4063
STG/CAD		1.6338			1.6377
AUD/CAD		0.9424			0.9484
CAD/JPY		92.82			93.73
CAD/CHF		0.8746			0.8778
CAD/HKD		7.3455			7.3512
CAD/CNY		5.8115			5.8159
CAD/MXN		12.6839			12.4156
Commodities
Gold		$1,412.00			$1,395.00
OIL		$106.90			$106.44
US DOLLAR INDEX
P.CLOSE		81.42			81.41
OPEN		81.5			81.47
US 10YR YIELD		2.80%			2.82%

 

GFX Morning FX Commentary August 26th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0580-1.0560

Today’s expected range for the Canadian Dollar against the Euro is 1.4020-1.4100

Today’s expected range for the Canadian Dollar against Sterling is 1.6350-1.6430

The US Dollar is marginally stronger this morning in quiet FX trading conditions, the UK market is closed today for the summer bank holiday so that greatly reduced the trading activity. Market conditions are pretty much the same to start the new week, the selloff in Emerging market continues ( the Indian Rupee is back near the all-time record low), flows out of emerging markets seem to be supporting the Euro and Sterling, financial markets remained on Fed watch to see when the Fed will start to taper their stimulus program and the Canadian Dollar remains weak against the Euro and Sterling which in turn is driving the weakness in the Loonie against the US Dollar.

Up today we do get the release of the US Durable Goods report which I think financial markets will pay a little bit more attention to, on Friday the US New Homes sales plunged almost 14% last month so if the US Durable Goods report comes in worse than expected we may see the US Dollar get hit, otherwise USD.CAD should trade within recent rages. Until I see EURO.CAD and GBP.CAD start to retreat I feel the Loonie should remain under pressure to weaken against the US Dollar.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0518			1.0556
CAD/USD		0.9507			0.9473
EUR/USD		1.3368			1.3356
EUR/CAD		1.4063			1.41
STG/CAD		1.6377			1.6487
AUD/CAD		0.9484			0.9502
CAD/JPY		93.73			93.71
CAD/CHF		0.8778			0.8756
CAD/HKD		7.3512			7.3261
CAD/CNY		5.8159			5.7973
CAD/MXN		12.4156
Commodities
Gold		$1,395.00			$1,374.00
OIL		$106.44			$105.15
US DOLLAR INDEX
P.CLOSE		81.41			81.5
OPEN		81.47			81.57
US 10YR YIELD		2.82%			2.90%

 

 

 

GFX Morning Commentary August 23rd, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0520-1.0600

Today’s expected range for the Canadian Dollar against the Euro is 1.4070-1.4170

Today’s expected range for the Canadian Dollar against Sterling is 1.6400-1.6475

The US Dollar is all over the map this morning after a wild ride during the Asian and London trading sessions. In Europe the US Dollar was weaker against Sterling for most of the morning as the UK GDP report was revised higher for the 2^nd quarter, further indication that the UK may be emerging out of its five year slump. That strength for the Sterling was very short-lived as GBP.USD dropped over 70 points in a matter minutes on some large sell orders. I think the currency markets are going to be very volatile over the next little while, with interest rates starting to edge higher investors are becoming increasing concerned that the global recovery will not be sustainable if interest rates go higher.

The sell-off in emerging market currencies continues with the flow of money for the most part going into the Euro, in India the Government has introduced capital controls and in Brazil the government has committed $60 Billion Dollars to defend the Brazilian Real from dropping in value, we are seeing a dramatic shift away from investment in these economies and back into Europe and the USA.

The Canadian Dollar continues to weaken off dramatically and for the most part it is weakening against the USD as a result of being very weak against the Euro and Sterling. EURO.CAD has jumped to a high of 1.4100 this morning, it has not been this high in two years and GBP.CAD is trading up near 1.6425, it has not been this high since 2010. Until we see the Loonie rebound against the Euro and Sterling it will remain weak against the US Dollar and 1.0600 is a very strong possibility today.

Up today we get the Canadian CPI report which will be watched closely by the market, if there are signs that inflation is growing in Canada then the Loonie will recover on the expectation of higher interest rates from the Bank of Canada, if inflation is benign then look for USD.CAD to jump a bit higher. Either way I think we are in for a period of enhanced volatility, make sure you take advantage of it.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0556			1.0493
CAD/USD		0.9473			0.953
EUR/USD		1.3356			1.3309
EUR/CAD		1.41			1.3964
STG/CAD		1.6487			1.6341
AUD/CAD		0.9502			0.9435
CAD/JPY		93.71			94
CAD/CHF		0.8756			0.8837
CAD/HKD		7.3261			7.3685
CAD/CNY		5.7973			5.8298
CAD/MXN					12.6241
Commodities
Gold		$1,374.00			$1,368.00
OIL		$105.15			$104.41
US DOLLAR INDEX
P.CLOSE		81.5			81.35
OPEN		81.57			81.68
US 10YR YIELD		2.90%			2.85%