GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.1080-1.1180

Today's expected range for the Canadian Dollar against the Euro is 1.5320-1.5400

Today's expected range for the Canadian Dollar against Sterling is 1.8560-1.8630

The US Dollar is mixed this morning as a report showing higher than expected inflation in the Euro-Zone helped to push EURO.USD up above 1.3800 this morning, the dollar is unchanged against Sterling and higher against the Yen. With this strong inflation report EU investors are less likely to expect that the ECB will announce further interest rate cuts with inflation on the rise. 

The situation in Ukraine continues to worsen as what appear to be professional troops (possible Russian troops not in uniform) continue to occupy more and more Government buildings in the Crimea. For now the new Ukrainian Government is doing nothing but that could change at any moment. Students of history will know that the Crimea was Russian territory for hundreds of years and was given to the Ukraine in 1954 by Khrushchev, the fact that the population is largely Russian speaking will make this a very dangerous situation.

Of interest in all of this is the value of the Russian Ruble as it continues to fall, with inflation concerns in Russia on the rise the Russian Government may have to increase interest rates to stop the slide of the Ruble. Also in overseas currency news the Chinese Yuan hit a 10 month low as investors there expect the Government band for the currency to be widened in the coming days.

The Canadian Dollar is ‎unchanged against the US Dollar and weaker against the Euro and Sterling. Trading today will be dominated by the US and Canadian GDP reports for December. In the US we are expecting a growth level of 2.9% which is down from the previous period, in Canada we are expecting a growth rate of 2.6% on an annualized basis, the big question is how much effect did the winter weather have on these numbers?

A very poor Canadian number should be able to push USD.CAD up towards the 1.1200 level.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1128			1.1124
CAD/USD		0.8986			0.899
EUR/USD		1.3788			1.3659
EUR/CAD		1.5345			1.5194
STG/CAD		1.8582			1.8508
AUD/CAD		0.9971			0.9942
CAD/JPY		91.52			91.53
CAD/CHF		79.23			0.8013
CAD/HKD		6.9532			6.9541
CAD/CNY		5.5217			5.5051
CAD/MXN		11.92			11.9978
Commodities
Gold		$1,329.00			$1,332.00
OIL		$102.29			$102.40
US DOLLAR INDEX
P.CLOSE		80.28			80.41
OPEN		79.91			80.48
US 10YR YIELD		2.67%			2.64%