GFX Morning FX Commentary October 31st, 2013

Good Morning

Today's expected range for the Canadian Dollar against the US Dollar is 1.0425-1.0500

Today's expected range for the Canadian Dollar against the Euro is 1.4230-14300

Today's expected range for the Canadian Dollar against Sterling‎ 1.6750-1.6825

Happy Halloween, may the ghosts of previous financial crashes lie quiet this evening.

The US Dollar is much stronger this morning as the currency world reacts to the Federal Reserve announcement yesterday. The Fed as expected kept interest rates and its stimulus program at current levels but it did indicate that despite the shutdown the economy is still showing sign of improving which got investors speculating that tapering of stimulus could happen early into next year as opposed to the 2nd quarter. As a result of this stocks were hit and the US Dollar surged. Whether the gains made by the Greenback can be sustained will now depend on the economic data, as the Fed tapers investors will look for signs that the economy is growing and if it is not then stocks will get hit hard and the US Dollar will surge.

Yesterday saw USD.CAD surge up near 1.0500 on the Fed announcement, this morning the Canadian Dollar is quite strong as USD.CAD has pulled back towards 1.0450 and both EURO.CAD and GBP.CAD are lower by over 2% from their highs earlier in the week, so overall a great night for the Loonie. Over the medium I still favour a push higher but the Loonie could see a little strength over the next couple of sessions as it consolidates.

Up today we should have a busy morning with the release of some secondary US data and the release of the Canadian GDP report for August. We are expecting a growth level of 1.7% year over year and a monthly rate of 0.1%, these levels still show that the economy is barely growing more than the inflation rate so pretty much the economy is stagnant, a very poor number will quickly push USD.CAD back up towards 1.0500.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0447			1.0447
CAD/USD		0.9572			0.9572
EUR/USD		1.3658			1.3754
EUR/CAD		1.4273			1.4378
STG/CAD		1.6741			1.6791
AUD/CAD		0.9947			0.9938
CAD/JPY		93.94			93.99
CAD/CHF		0.864			0.8587
CAD/HKD		7.4148			7.4138
CAD/CNY		5.8285			5.8293
CAD/MXN		12.3985			12.35
Commodities
Gold		$1,335.00			$1,350.00
OIL		$96.87			$97.48
US DOLLAR INDEX
P.CLOSE		79.77			79.68
OPEN		80.04			79.6
US 10YR YIELD		2.51%			2.49%