GFX Morning FX Commentary Nov 7th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0380-1.0450

Today’s expected range for the Canadian Dollar against the Euro is 1.3920-1.4020

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

The US Dollar was little changed during the overnight session as the markets were awaiting the interest rate announcements form the Bank of England and the European Central Bank this morning. The Bank of England announced earlier that they were keeping interest rates on hold at 0.5% and were not making any changes to their stimulus program. As this was as expected this announcement did not have much effect on the value of Sterling and we now await the minutes of the meeting which will be released in two weeks.

As I write the European Central bank has caught financial markets off guard by announcing a 0.25% interest rate cut moving interest rates down to 0.25%. Directly before this announcement EURO.USD was trading at 1.3520 and then immediately dropped in a straight line to trade at 1.3380, EURO.CAD was trading above 1.4100 and now you can buy below 1.4000, a massive drop in the value of the Euro. This will make Governor Draghi’s press conference at 08:30 very interesting.

The  Canadian Dollar had a very quiet night as it held onto the gains it made yesterday afternoon, obviously the big rally for the Loonie is now in the  Euro and to a lesser degree the Sterling, I think with this big drop in the Euro it creates a very great opportunity for Euro buyers and they really should jump on it. I am not sure if this move has a lot more legs to it before we see some pullback so please take some money off the table if you need to buy an Euro.

Next up today is the US GDP report for the third quarter, we are expecting a growth rate of 2.0% which will have dropped due to the US Government shutdown, the last number was 2.5% so a clear slowdown in the US economy. A strong number should push USD.CAD back up towards 1.0450 and a weak number may give the currency pair the impetuous to drop below the 1.0400, what is already a very volatile morning in Euro-Land may turn into a volatile morning here in North America.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0408			1.0444
CAD/USD		0.9607			0.9575
EUR/USD		1.3513			1.3512
EUR/CAD		1.4066			1.4115
STG/CAD		1.6738			1.681
AUD/CAD		0.9877			0.9949
CAD/JPY		94.78			94.38
CAD/CHF		0.8762			0.8725
CAD/HKD		7.441			7.4148
CAD/CNY		5.8504			5.8312
CAD/MXN		12.662			12.6021
Commodities
Gold		$1,314.00			$1,318.00
OIL		$95.10			$94.12
US DOLLAR INDEX
P.CLOSE		80.57			80.8
OPEN		80.61			80.62
US 10YR YIELD		2.64%			2.66%