GFX Morning FX Commentary

Good morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0880-1.0950

Today's expected range for the Canadian Dollar against the Euro is 1.4900-1.4970

Today's expected range for the Canadian Dollar against Sterling is 1.7910-1.7990   

The US Dollar is mixed this morning as it is stronger against the Euro and Sterling  but weaker against the Yen and some of the commodity currencies. With the onset of the very poor US Jobs report expectation is growing that the Federal Reserve will pause on the reduction of their stimulus program when they announce their interest rate policy at the end of the month. If they do pause this month then we should continue to see enhanced volatility in the currency markets.

The Canadian Dollar is still under pressure at the moment as it was not one of the commodity currencies that was able to extend any gains against the US Dollar. The Loonie is still reeling from the very poor jobs report on Friday with renewed calls for the Federal government to abandon their austerity program and put more stimulus into the economy. The Loonie is a bit stronger from its weakest point on Friday and should now start to stabilize ahead of the US Federal Reserve announcement at the end of the month.

Over the next few weeks I do not see a scenario where we will see prolonged Canadian Dollar strength, I would expect that at the Bank of Canada meeting on Jan 22^nd that they will now hint at lowering Canadian interest rates and with the economy looking to slow down it just does not make much sense that the Loonie will go on a big run. I think you will see some bouts of strength over the next few weeks but they won’t be significant and US Dollar buyers need to be ready to jump at any opportunities that are presented.

We do get the Bank of Canada business outlook survey being released today so that may bring some added volatility to the market if it has any dour predictions on the economy, for the most part we should stick close to today’s range.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0925			1.086
CAD/USD		0.9153			0.9208
EUR/USD		1.3664			1.3595
EUR/CAD		1.4932			1.4764
STG/CAD		1.796			1.7835
AUD/CAD		0.9891			0.9655
CAD/JPY		94.6			96.66
CAD/CHF		0.8261			0.8355
CAD/HKD		7.0773			7.1188
CAD/CNY		5.5322			5.5697
CAD/MXN		11.9325			12.0477
Commodities
Gold		$1,245.00			$1,232.00
OIL		$91.95			$92.67
US DOLLAR INDEX
P.CLOSE		80.64			80.94
OPEN		80.6			81
US 10YR YIELD		2.85%			2.97%