GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1140-1.1220

Today’s expected range for the Canadian Dollar against the Euro is 1.5170-1.5250

Today’s expected range for the Canadian Dollar against Sterling is 1.8410-1.8500

The US Dollar is stronger this morning as the currency market is playing out much the way we thought it would after the Federal Reserve announced that they would continue to taper stimulus at the $10B a month pace. Global stocks market are all lower hitting 2½ month lows with the Dow Jones down over 180 point yesterday. Both EURO.USD and GBP.USD traded weaker with the Euro falling to 1.3580 against the Greenback, flows continue to move into safe haven currencies as investors see if the reduced stimulus is having an effect on US growth.

The Canadian Dollar continues to trade weaker this morning but in less volatile ranges, the Loonie is going to trade weaker over the short-term especially with the overall trend for a stronger US Dollar remaining in place. I can easily see that USD.CAD will test the 1.1200  level at some point today or tomorrow.

Trading today will be focused around the US 4^th Quarter GDP growth, on an annualized basis we are expecting US growth to drop from the previous high of 4.1% to 3.6%, (this number most likely will not yet reflect the Fed’s first month of tapering in December, that will most likely come in the first quarter of 2014) if this is a poor number investors will get nervous and stocks will get hit hard and the US Dollar will jump on the safe haven effect. Either way I think we will see enhanced volatility surrounding this release, make sure you have your orders in place.

Have a great day

Mike
msmith@gfxpartners.ca

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1182			1.1148
CAD/USD		0.8943			0.897
EUR/USD		1.3595			1.3659
EUR/CAD		1.5209			1.5229
STG/CAD		1.8445			1.8445
AUD/CAD		0.9812			0.9749
CAD/JPY		91.61			92.09
CAD/CHF		0.8042			0.8054
CAD/HKD		6.9224			6.9451
CAD/CNY		5.4182			5.4294
CAD/MXN		11.9567			11.9629
Commodities
Gold		$1,254.00			$1,258.00
OIL		$97.79			$97.13
US DOLLAR INDEX
P.CLOSE		80.57			80.56
OPEN		80.86			80.6
US 10YR YIELD		2.70%			2.76%