GFX Morning FX Commentary October 2nd, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0300-1.0375

Today's expected range for the Canadian Dollar against the Euro is 1.3960-1.4030

Today's expected range for the Canadian Dollar against Sterling is 1.6730-1.6800

The US Dollar is marginally weaker against the Euro and Sterling but stronger against the Canadian Dollar this morning as financial markets weigh the cost to the economy of the Government shutdown and the approaching debt ceiling crisis. I thought the legal borrowing limit was to be reached in early November but from what I read this morning it looks like the debt limit could be reached by mid-October, the closer we get to that limit the more volatile the currency markets will become. Presently there are  no talks planned to restore the budget so we are in for some interesting days ahead.

This morning the ECB kept interest rates at the 0.5% and we are expecting Governor Draghi to announce a possible cash infusion into the regions banking system. The Euro seems to have stabilized a bit as Berlusconi looks like he has backed down on his threats to shut-down the Italian parliament, enough members of his party were going to vote with the government so he Is trying to save face.

The Canadian Dollar continues to weaken off as USD.CAD slowly moves back higher, the currency pair is playing out over the short-term as we thought it might. We  have seen this many time before, as uncertainty builds the US Dollar gets weaker and so does the Loonie at the same time, look for USD.CAD to continue to push higher over the very short-term.

Up today we do get the ADP private employers report and while I tend to normally ignore this number it may take on added significance today as Friday’s release of the US Labour market has been cancelled because of the government shut down. If you are a US Dollar buyer and you will need some over the next few weeks you really need to be concerned that a government shutdown in the US will push USD.CAD back up to 1.0400 and possibly higher, talk to us today about some strategies you can employ.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0347			1.0301
CAD/USD		0.9664			0.9708
EUR/USD		1.352			1.3544
EUR/CAD		1.3993			1.3955
STG/CAD		1.678			1.6725
AUD/CAD		0.9679			0.9712
CAD/JPY		94.11			94.87
CAD/CHF		0.874			0.8771
CAD/HKD		7.4881			7.5221
CAD/CNY		5.9131			5.9398
CAD/MXN		12.7916			12.757
Commodities
Gold		$1,296.00			$1,331.00
OIL		$101.86			$102.40
US DOLLAR INDEX
P.CLOSE		80.27			80.33
OPEN		80.25			80.13
US 10YR YIELD		2.64%			2.65%