GFX Mornign FX Commentary September 6th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0420-1.0520

Today’s expected range for the Canadian Dollar against the Euro is 1.3680-1.3780

Today’s expected range for the Canadian Dollar against Sterling is 1.6260-1.6360

The US Dollar is marginally stronger this morning in quiet overnight markets with the Canadian Dollar for once being one of the most active currencies. In the UK the Pound was trading lower this morning (GBP.USD fell to trade at 1.5565) as a UK manufacturing report came in a little weaker than expected ending the long string of positive economic data out of the UK. The Euro is a little weaker as currency traders close out their long Euro positions ahead of the US Employment report this morning.

The Canadian Dollar is (surprisingly to me) quite a bit stronger as I thought it would continue to trade around the 1.0500 level ahead of this morning’s Canadian employment report. In talking to some currency traders this morning I get a sense that speculators who were long US Dollar and short Canadian Dollars anticipation a move higher for USD.CAD started to bail-out ahead of this morning’s employment report, I think this started a bit of a cascade as a lot of stop-loss orders were triggered on the move down towards 1.0450. I think the market will now stay at these levels until the release of the Employment report at 08:30.

For the US number we are expecting an increase in US payrolls of 180,000 and no change to the unemployment rate. In Canada we are expecting 20+K new jobs to have been created, after last month’s loss of 18K jobs this will be a quick turnaround for Canada which I think may have been offset by flood relief jobs in Calgary. If we see a strong Canadian number (upwards of 25K+) I think we will see a pullback of USD.CAD towards 1.0425, if we see a poor number USD.CAD will be back above 1.0500 quite easily. Either way I am expecting it to be quite volatile after the releases so make sure you have your orders in early.

Have a great weekend.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0454			1.0481
CAD/USD		0.9565			0.9541
EUR/USD		1.3106			1.3213
EUR/CAD		1.5571			1.3852
STG/CAD		1.6282			1.6377
AUD/CAD		0.957			0.9588
CAD/JPY		0.954			95.27
CAD/CHF		0.9038			0.8939
CAD/HKD		7.4134			7.3932
CAD/CNY		5.85			5.835
CAD/MXN		12.8009			12.7724
Commodities
Gold		$1,364.00			$1,395.00
OIL		$108.53			$107.75
US DOLLAR INDEX
P.CLOSE		82.67			82.2
OPEN		82.64			82.2
US 10YR YIELD		2.97%			2.89%