GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0870-1.0950

Today's expected range for the Canadian Dollar against the Euro is 1.4870-1.4950

Today's expected range for the Canadian Dollar against Sterling is 1.7880-1.7960

The US Dollar is mixed this morning as once again the Japanese Yen has dominated the overnight currency markets. Japan reported this morning a widening Current Account deficit which indicates that their plan to weaken the Yen and increase exports is not having the desired effect, the shutdown of the nuclear plants has forced the economy to import quite a lot of energy so this is putting a drag on the economy. Japan is pouring massive amounts of stimulus into their economy and to date the results have been mixed.

The Dollar is weaker against both the Euro and Pound as inflation data in the UK showed that inflation was hitting the Bank of England target for the first time in more than four years. If this trend holds over the coming months it should boost the UK recovery.

The Canadian Dollar is weaker against it US counterpart this morning, yesterday saw the Loonie at one point rally about 100 points from its weakest point on Friday, but as we expected bouts of Canadian Dollar strength will be short-lived for the moment and USD.CAD moved quickly back higher overnight. We still encourage US Dollar buyers to make some forward purchases anytime we see Canadian Dollar strength. 

The Canadian Dollar remains weak against the Euro and Sterling as both of those currency pair approach psychological levels, ERUO.CAD is nearing the 1.5000 level and GBP.CAD is nearing the 1.8000 level, we see the Loonie remaining weak and hitting both of those levels in the coming weeks.

Up today we get the US retail Sales report for December and markets will be watching to see if this number is as disappointing as the December jobs report was, were are expecting a rise of 0.3% which would be less than the November number that came in at 0.7%.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.09			1.0925
CAD/USD		0.9174			0.9153
EUR/USD		1.3677			1.3664
EUR/CAD		1.4911			1.4932
STG/CAD		1.7915			1.796
AUD/CAD		0.9806			0.9891
CAD/JPY		95.01			94.6
CAD/CHF		0.8266			0.8261
CAD/HKD		7.0929			7.0773
CAD/CNY		5.5401			5.5322
CAD/MXN		12.05			11.9325
Commodities
Gold		$1,247.00			$1,245.00
OIL		$91.98			$91.95
US DOLLAR INDEX
P.CLOSE		80.57			80.64
OPEN		80.56			80.6
US 10YR YIELD		2.85%			2.85%