GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1160-1.1260

Today’s expected range for the Canadian Dollar against the Euro is 1.5550-1.5650

Today’s expected range for the Canadian Dollar against Sterling is 1.8600-1.8700

The US Dollar is mixed this morning as it is marginally stronger against the Euro but weaker against the Pound in fairly quiet overnight markets. In the UK the Sterling has jumped as the Bank of England said that there is a likelihood that the Pound will continue to rise, in Europe the Euro traded a little weaker as the currency markets get set up for today’s US Federal Reserve announcement.

The Russian Ruble has strengthened for the third straight day as Putin has calmed investor fears by stating he has no interest in the further splitting of Ukraine. I am a bit of a student of history and I seem to recall a certain German leader saying the same thing in 1939 after he annexed Czechoslovakia, so forgive me if I do not put too much stock on what Putin says at the moment.

There is not many times a year that I can write this commentary and say that the Canadian Dollar was the most active currency in the overnight FX markets but today is one of those days, any US Dollar buyer hoping to purchase some US around the 1.1000 level can thank Bank of Canada Governor Stephen Poloz for letting that opportunity slip away. Yesterday in a speech to the Halifax Chamber of Commerce Poloz raised concerns about growth in the Canadian economy and stated that interest rate cuts may be needed to further stimulate the economy. As you would expect the Canadian Dollar took it on the chin and weakened off by over 1% in afternoon trading, that trend continued into overnight markets as the Loonie lost another 0.5%. The next Bank of Canada interest rate announcement is scheduled for April 16^th so that will take on much more added significance given his comments from yesterday. What puzzles me is why did the Bank not mention this concern in their March 5^th statement, you have heard me say many times before that financial markets do not like uncertainty and this speech  will create great uncertainty in Canada going forward.

Today will be a busy day as the market gets ready to hear form the US Federal reserve, this will be Chairperson Janet Yellen first announcement and the market will be looking to see if she keeps the stimulus reduction program in place. Make sure you have your orders in place, US Dollar sellers should be looking to take advantage of this spike by looking at some forward contracts and short-term US Dollar buyers should be looking at 1.1150 as a good pull-back opportunity to buy some US.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1175			1.1054
CAD/USD		0.8948			0.9046
EUR/USD		1.3924			1.39
EUR/CAD		1.5562			1.5368
STG/CAD		1.8585			1.8355
AUD/CAD		1.0183			1.0056
CAD/JPY		90.82			91.73
CAD/CHF		0.7821			0.7908
CAD/HKD		6.9256			7.0038
CAD/CNY		5.543			5.6013
CAD/MXN		11.7869			11.9384
Commodities
Gold		$1,347.00			$1,362.00
OIL		$99.62			$98.10
US DOLLAR INDEX
P.CLOSE		79.34			79.38
OPEN		79.44			79.44
US 10YR YIELD		2.67%			2.67%