GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0925-1.1000

 

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 1.7940-1.8020

The US Dollar is marginally stronger this morning as it recovers from a two week low against the Euro. This morning Germany reported a lower growth rate for the last quarter of 2013, the report showed that growth only increased by 0.4% which is barely above recession level and just underlies the difficulties that Europe still face. The Dollar is also stronger on the expectation that the New York state manufacturing data is expected to show a significant increase, another positive sign for the US recovery.

The Canadian Dollar is still weak and USD.CAD is still trading at multi-year highs, it was just a few weeks ago that I was talking about USD.CAD reaching 1.1000 this quarter and we have almost achieved that target in two weeks, volatility has returned to the FX markets with a vengeance. We are hearing a lot of talk about knock our barrier options at the 1.1000 level, I won’t go into detail on how those options work, if you would like to know just drop me a note but suffice to say a lot of times currency pairs will gravitate to those levels so I won’t be surprised if USD.CAD hits the 1.1000 in the next couple of days.

Up today as mentioned we get the New York Manufacturing data and some  secondary inflation data so we may see some enhanced volatility against today. Hard as it is to imagine US Dollar buyers need to be ready if we see any pullback towards 1.0900 now, this may in fact be a great level if we break above 1.1000 as expected.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0963			1.09
CAD/USD		0.9121			0.9174
EUR/USD		1.3624			1.3677
EUR/CAD		1.4939			1.4911
STG/CAD		1.801			1.7915
AUD/CAD		0.9775			0.9806
CAD/JPY		95.08			95.01
CAD/CHF		0.827			0.8266
CAD/HKD		7.0515			7.0929
CAD/CNY		5.5115			5.5401
CAD/MXN		11.9519			12.05
Commodities
Gold		$1,238.00			$1,247.00
OIL		$92.84			$91.98
US DOLLAR INDEX
P.CLOSE		80.64			80.57
OPEN		80.87			80.56
US 10YR YIELD		2.87%			2.85%