GFX Morning Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0820-1.0900

Today's expected range for the Canadian Dollar against the Euro is 1.4750-1.4820

Today's expected range for the Canadian Dollar against Sterling is 1.7840-17900

The US Dollar is mixed this morning as it is weaker against the Euro but stronger against the commodity currencies and Sterling.

With it being a key day for European interest rates the Euro is stronger this morning as a strong Business Confidence report has helped push the Euro higher, the Pound was a little weaker against the dollar as the market reacted to poor trade data out of the UK.

As expected this morning the Bank of England left its benchmark interest rates at 0.5% and did not change its stimulus program. NO surprise here as BOE Governor Carney has publicly stated interest rates will stay low until the UK employment rate hits 7.0%, the current rate is 7.4%

The European Central Bank as expected left interest rates unchanged, this was after they lowered them last month. The markets will now await Governor Draghi’s morning press conference to get some guidance on the EU economy.

The Canadian Dollar keeps getting hammered, 1.06 level of last week now seems a distant memory, the Canadian Dollar and other commodity currencies keep getting hit hard on the world’s currency markets. Since Jan 2^nd USD.CAD is up almost 2.5% which is a huge move in such a short period of time. I am very surprised as the speed of this move, all the technical charts are pointing that the move is overdone. I think you may yet see a move to 0.92(1.0870) and then see a bit of a stabilization and a pullback.

Up today we of course get the ECB press conference but we also get some housing data out of Canada so we may see some volatility out the markets just yet. This afternoon the currency markets should consolidate ahead of tomorrow’s all Important employment data. Overall we still favour USD.CAD to break higher but this is well overdone at the moment and we should see some kind of a pullback towards 1.0800 at the very least.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0845			1.08
CAD/USD		0.922			0.9259
EUR/USD		1.3548			1.3582
EUR/CAD		1.4762			1.4672
STG/CAD		1.7867			1.7745
AUD/CAD		0.9637			0.964
CAD/JPY		96.67			97.02
CAD/CHF		0.8379			0.843
CAD/HKD		7.1381			7.1745
CAD/CNY		5.582			5.6
CAD/MXN		12.0942			12.0751
Commodities
Gold		$1,228.00			$1,225.00
OIL		$92.67			$93.88
US DOLLAR INDEX
P.CLOSE		81.05			80.86
OPEN		81			81.02
US 10YR YIELD		2.99%			2.94%