GFX Morning FX Commentary October 18th, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0260-1.0340

Today's expected range for the Canadian Dollar against the Euro is 1.4060-1.4120

Today's expected range for the Canadian Dollar against Sterling is 1.6640-1.6700

The US Dollar continues to weaken and stocks continue to soar as markets are increasingly looking to the Federal Reserve to keep the stimulus taps flowing. Global stocks reached a new 5 year high overnight as the Chinese economy sprang back to life last quarter with a growth level over 7%, what would the west pay for numbers that were half as big. Both the Euro and Sterling were higher again last night so it looks like the flow of money is leaving the US for the moment and heading over to Europe as global investors lose confidence in the American political system.

The Canadian Dollar is settling in around the 1.0300 level as we thought it would, given the overall weakness in the US Dollar you might expect that USD.CAD would fall sharply but it does not appear to be the case, right now the Loonie is very weak against other currencies and just hanging around against the US Dollar. I still feel that the Loonie is getting lumped in with the US Dollar and will find it difficult to garner a lot of strength in the coming days unless we get a fundamental changes over the next few weeks.

Up today we get the Leading indicators out of the US and Canadian CPI inflation report for September, we are expecting an inflation of 1.0%, with a core rate of 1.3%. I do not expect any surprises out of the inflation report so look for USD.CAD to continue trade in and around the 1.0300 level.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0284			1.03
CAD/USD		0.9724			0.9709
EUR/USD		1.37			1.3621
EUR/CAD		1.4094			1.4033
STG/CAD		1.6686			1.655
AUD/CAD		0.9945			0.9899
CAD/JPY		94.85			95.13
CAD/CHF		0.8782			0.9775
CAD/HKD		7.5327			7.5218
CAD/CNY		5.9179			5.9166
CAD/MXN		12.432			12.4709
Commodities
Gold		$1,319.00			$1,305.00
OIL		$100.93			$101.77
US DOLLAR INDEX
P.CLOSE		79.74			80.58
OPEN		79.66			80.01
US 10YR YIELD		2.54%			2.63%