GFX Morning FX Commentary October 8th, 2103

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0270-1.0350

Today's expected range for the Canadian Dollar against the Euro is 1.3980-1.4050

Today's expected range for the Canadian Dollar against Sterling is 1.6600-1.6670

The US Dollar is marginally weaker this morning as speculation is growing that the current crisis in Washington will soon be resolved. There are reports that the Democrats in the Senate are planning a test vote which if passed may give the President the authority to extend the borrowing limit out a year. I am not sure such a tactic will be legal but I guess the Democrats will try just about anything at this point. This crisis will come right down to the wire and I hope will be resolved to the satisfaction of financial markets.

Sterling is lower this morning in spite of further strong data out of the UK. There is a growing perception in financial markets that the UK economy cannot sustain these positive growth numbers and that the Pound is just too strong. Further strength in the pound will be hard to come by and it should trade with a weak bias over the next little while unless the economy continues to produce stellar results going forward.

The Canadian Dollar is unchanged as it continues to sit  on the sidelines of the world’s financial markets, it will be interesting to see if the developing Brazilian spy-gate scandal has any effect on the world's view of Canada and if it undermines confidence in our economy. Something that went under the radar this week is the announcement by the Malaysian government owned energy company Petronas of a $36 Billion investment in the Canadian Energy sector. While I don’t think the investment is finalized the plan is to build a liquefied natural gas (LNG) plant and fund the building of a Canadian pipeline from the plant.  I would imagine that it will take some time to get this deal finalized and getting a pipeline built in this country especially through native lands is no easy feat but if they pull it off it will be an amazing deal for the Canadian economy. Petronas already paid $6B for progress Energy last year so they are very familiar with the Canadian energy sector.

Up today we were scheduled to get the US Trade Balance for August released but that release has been postponed, Canadian Dollar traders will look towards the Canadian Housing starts and Merchandise Trade Balance for August to see if we can get the Loonie moving. I still favour a move higher for USD.CAD but that view has been hard to come by these days with all Canadian Dollar volatility confined to the Euro, Sterling and other cross currencies.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0316			1.0317
CAD/USD		0.9694			0.9693
EUR/USD		1.357			1.3577
EUR/CAD		1.4001			1.401
STG/CAD		1.6593			1.6582
AUD/CAD		0.9793			0.9717
CAD/JPY		94.07			93.9
CAD/CHF		0.8764			0.875
CAD/HKD		7.5108			7.51
CAD/CNY		5.9308			5.9308
CAD/MXN		12.7066			12.7738
Commodities
Gold		$1,322.00			$1,314.00
OIL		$103.78			$102.89
US DOLLAR INDEX
P.CLOSE		80.02			80.24
OPEN		80.07			80.09
US 10YR YIELD		2.64%			2.62%