GFX Morning FX Commentary Nov 1st, 2013

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar 1.0375-1.0450

Today's expected range for the Canadian Dollar against the Euro 1.4050-1.4125

Today's expected range for the Canadian Dollar against Sterling is 1.6610-1.6685   

The US Dollar is stronger this morning as the Euro steadily weakened overnight on the expectation that the European Central Bank will need to cut interest rates when they meet next week. Worrying data out of the Euro-Zone yesterday saw inflation dropping and unemployment rising which is a recipe for disaster, it looks like the great run the Euro enjoyed may be coming to an end. Sterling continued its strong run but more so against the Euro that the US at the moment as the UK reported their 7th straight month of manufacturing gains.

The Canadian Dollar had a strong night as it was able to pull back some gains against the US Dollar yesterday afternoon, but with the weakness in Europe the Loonie has really moved stronger against the Euro, recovering some 3% this week. It certainly appears that the direction of the Loonie is coming from the Euro and Sterling and not from the US Dollar. If we see EURO.CAD continue to drop then I look for a gradual decline of USD.CAD back below 1.0400, if the ECB cuts interest rates next week then this could be a big turnaround for the Euro and we may see the Loonie benefit. US Dollar sellers may want to think about lowering the 1.0500 orders down to 1.0450 or 1.0425 we may not see the quick rise in USD.CAD for a while yet.

Up today we get the release of the some manufacturing data out of the US, continued strong data out of the US and weak data out of Europe should start to bring more flows back to North America.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.042			1.0447
CAD/USD		0.9597			0.9572
EUR/USD		1.352			1.3658
EUR/CAD		1.4089			1.4273
STG/CAD		1.669			1.6741
AUD/CAD		0.987			0.9947
CAD/JPY		94.29			93.94
CAD/CHF		0.8735			0.864
CAD/HKD		7.4348			7.4148
CAD/CNY		5.8503			5.8285
CAD/MXN		12.5622			12.3985
Commodities
Gold		$1,315.90			$1,335.00
OIL		$96.36			$96.87
US DOLLAR INDEX
P.CLOSE		80.33			79.77
OPEN		80.59			80.04
US 10YR YIELD		2.57%			2.51%

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