GFX Morning FX Commentary October 23rd, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0280-1.0350

Today’s expected range for the Canadian Dollar against the Euro is 1.4150-1.4230

Today’s expected range for the Canadian Dollar against Sterling is 1.6620-1.6700

The US Dollar is considerably stronger in overnight currency markets as a dramatic rise in borrowing costs for Chinese Banks created worry about economic growth in China. This caused a run to safe haven assets giving strength to the US Dollar and the Yen. EURO.USD which had been on a nice run fell to trade at 1.3740 and Sterling which is on  a huge run of momentum fell to trade at 1.6120, with stocks pointing to the downside today we may see further strength for the US Dollar.

Last night the Canadian Dollar gave back what little strength it gained off of the poor US employment report yesterday and USD.CAD jumped higher on the Chinese news, the Loonie did fair better than other commodity currencies with both Aussie and Kiwi dropping over 1% last night. I still feel that the Loonie is vulnerable at these levels and I won’t be surprised if we see USD.CAD move back towards 1.0400 in the coming days. Anything below 1.0300 will represent good value for US Dollar buyers on a forward basis.

Canadian Dollar trading will today be dominated by the Bank of Canada interest Rate policy announcement (10:00 am), we are not expecting any changes to the interest rate nor are we expecting any change to their forecast on when interest rates will start to move higher. Bloomberg is reporting that they will most likely revise downward their growth expectations for 2^nd half growth in the economy which should be a US Dollar negative. If the downgrade is significant we could easily see USD.CAD up at 1.0350 today.

I will be out of the office today attending a conference on the newly formed MSB organization. I will be accessible via email and will monitor developments from my Blackberry.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0319			1.029
CAD/USD		0.969			0.9718
EUR/USD		1.3743			1.367
EUR/CAD		1.4184			1.4072
STG/CAD		1.6644			1.6599
AUD/CAD		0.9929			0.9952
CAD/JPY		94.26			95.57
CAD/CHF		0.8672			0.8757
CAD/HKD		7.5078			7.5326
CAD/CNY		5.8943			5.9204
CAD/MXN		12.5588			12.432
Commodities
Gold		$1,331.00			$1,313.50
OIL		$96.88			$98.94
US DOLLAR INDEX
P.CLOSE		79.3			79.8
OPEN		79.43			79.3
US 10YR YIELD		2.51%			2.51%