GFX Morning FX Commentary September 4th, 2013

Good Morning,

Today’s expected range for the Canadian  Dollar against the US Dollar is 1.0460-1.0560

Today’s expected range for the Canadian Dollar against the Euro is 1.3820-1.3900

Today’s expected range for the Canadian Dollar against Sterling is 1.6360-1.6440

The US Dollar is marginally weaker to start the day as positive economic news from around the globe seems to be growing investor confidence that the global recovery is back on pace. In China the economy reported that their services industry expanded, in Australia the GDP grew at a faster pace than was expected and in England the pound rose to a three-month high against the Euro as UK services expanded at the fastest pace since 2006. A very good night for the economists of the world which pulled the US Dollar back a little bit but surprisingly the equity markets did not like what they saw as most were in negative territory overnight, it could be the Syria situation weighing on investor confidence at the moment.

The biggest currency mover overnight were the Australian and New Zealand Dollars as they rallied almost 2% on the back of the strong GDP report, they are starting to recover the tremendous beating that they took at the beginning of last month. The emerging market currencies continue to remain under pressure in the Far East especially as the Indian Rupee and Indonesian Rupiah continue to struggle.

With the strength in the Aussie and Kiwi Dollars overnight the Canadian Dollar was able to pull back a little strength last night against the US Dollar (and continues to slowly strengthen against the Euro) as it traded back below 1.0500 but still basically is trading in very tight ranges. Trading today will be dominated by the 10:00 Bank of Canada interest rate announcement, we are not expecting any changes to interest rate policy, Canadian financial markets will be looking at the statement to see any hints of when interest rate hikes will be occurring or for any comments on the possible tapering of financial stimulus by the US Federal Reserve. Given that the Canadian economic reports have been quite poor lately I would not be overly surprised if they bank stays away from any talk of interest rates hikes, such a “dovish” statement I think would move USD.CAD back higher but not by a whole lot.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.049			1.0531
CAD/USD		0.9533			0.9496
EUR/USD		1.3183			1.3175
EUR/CAD		1.3829			1.3872
STG/CAD		1.6382			1.6405
AUD/CAD		0.962			0.9512
CAD/JPY		0.9484			94.42
CAD/CHF		0.8922			0.888
CAD/HKD		7.388			7.3571
CAD/CNY		5.8292			5.8096
CAD/MXN		12.7265			12.755
Commodities
Gold		$1,403.00			$1,393.00
OIL		$107.79			$107.24
US DOLLAR INDEX
P.CLOSE		82.38			82.3
OPEN		82.29			82.41
US 10YR YIELD		2.85%			2.75%