GFX Morning FX Commentary October 10th, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0340-1.0425

Today's expected range for the Canadian Dollar against the Euro is 1.4030-1.4100

Today's expected range for the Canadian Dollar against Sterling is 1.6550-1.6620

The US Dollar is stronger this morning as there were hints that US House Republicans were willing to pass a short-term increase to the US debt ceiling and advert at least one financial crisis in the US. It sounds to me that they are just kicking the can down road, given what is happening in Europe these days I guess I should not be surprised with what politicians do.

The Pound is weaker again this morning ahead of the Bank of England's interest rate announcement. They are not expected to change the interest rate (currently 0.5%) and make no changes to their stimulus program. As I write the BOE announcement came in as expected and Sterling watchers will now await the minutes of the meeting which will be released in 2 weeks.

The Canadian Dollar is marginally stronger this morning which is not surprising as the indication of any US compromise to the debt ceiling crisis will stall the weakness of the Loonie. Overall I still favour a gradual push higher for USD.CAD but if there is agreement on a new debt ceiling then US Dollar buyers might get a bit of a respite.

With little economic data due out of the market today I don’t think USD.CAD will have a big trading range so look for USD.CAD to hang around the 1.0400 level for a little while. Canadian traders will then start to position themselves for tomorrow’s Canadian Employment report which I think will take on added significance to the Loonie as we have not had any US employment figures so far this month due to the government closure, I will talk a little bit more on this tomorrow ahead of the release. If we do have any sort of a pullback today in USD.CAD US Dollar buyers need to be ready, I think these opportunities may be short-lived going forward.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0384			1.0372
CAD/USD		0.963			0.9661
EUR/USD		1.353			1.3522
EUR/CAD		1.4033			1.4028
STG/CAD		1.6562			1.6574
AUD/CAD		0.9802			0.9807
CAD/JPY		94.19			93.8
CAD/CHF		0.8762			0.8771
CAD/HKD		7.461			7.4702
CAD/CNY		5.8894			5.8975
CAD/MXN		12.659			12.7131
Commodities
Gold		$1,302.00			$1,312.00
OIL		$102.11			$103.53
US DOLLAR INDEX
P.CLOSE		80.45			80.07
OPEN		80.52			80.4
US 10YR YIELD		2.70%			2.62%