GFX Morning FX Commentary August 8th, 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 1.3870-1.3950

Today's expected range for the Canadian Dollar against Sterling is 1.6120-16200

The US Dollar is weaker this morning as better than expected export data out of China and Germany have given a boost to investors that just maybe the fear of a global slowdown is not as great as first feared. In China exports for the month of July gained 10.9% over last year so very strong numbers for the Chinese economy, the Australian Dollar was the strongest currency overnight highlighting just how closely that country is affected by news out of China.

As we expected yesterday USD.CAD has pulled back from it highest levels as the Loonie has recovered some of its losses from the previous session, I do not expect the Loonie to stage a big rally as the data that we saw yesterday (very poor building permit report) out of Canada will have investors worried about a further slowdown in the Canadian economy. Canadian Dollar traders will be watching tomorrow's employment report for signs of a further slowing economy, unless we get a really strong report I don't think we will see the Loonie extend any significant gains.

Of interest to note is just how weak the Loonie is when compared to currencies other than the US Dollar. Against the Euro, the Loonie is trading above 1.3900 for the first time in almost two years, against the Pound the Canadian Dollar is trading at 1.6145 which is the lowest since May of last year. Clearly the Canadian Dollar is taking a beating on international currency markets so when you compare the Loonie to the US Dollar it is doing remarkably well, but if the Loonie remains this weak against other currencies there is little chance of it getting much stronger against the US Dollar. If you are a US Dollar buyer then keep this in mind as the risk of a run to 1.5000/1.0600 is greater than any pullback towards 1.0300/1.0250 levels at the moment.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0408			1.0415
CAD/USD		0.9608			0.9602
EUR/USD		1.3357			1.3306
EUR/CAD		1.3902			1.3859
STG/CAD		1.6142			1.6077
AUD/CAD		0.9448			0.9312
CAD/JPY		92.53			93.29
CAD/CHF		0.8846			0.8877
CAD/HKD		7.4313			7.4185
CAD/CNY		5.88			5.8761
CAD/MXN
Commodities
Gold		$1,288.00			$1,278.00
OIL		$104.41			$105.58
US DOLLAR INDEX
P.CLOSE		81.29
OPEN		81.18			81.59
US 10YR YIELD		2.60%			2.63%