GFX Morning Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.1065-1.1130

Today's expected range for the Canadian Dollar against the Euro is 1.5240-1.5300

Today's expected range for the Canadian Dollar against Sterling is 1.8420-1.8500

The US Dollar is again mixed this morning as the divergence in the Euro and UK economies continues. The US Dollar is stronger against the Euro as the expectation that the ECB will cut interest rates continues to weigh on the common currency and the Greenback is weaker against the Pound as yet again another strong economic report (Retail Sales) helps to push Sterling higher.

The so-called commodity currencies seem to be on a bit of a roll as last night the New Zealand Dollar jumped quite a bit on better than expected trade numbers and comments from Central Bank officials. The Canadian Dollar may be getting some benefit from the recent strength in both the Aussie and Kiwi Dollars.

The Canadian Dollar continues its strong run over the past couple of days, it continues to shake off the verbal intervention from the Bank of Canada which never lasts very long in currency markets, it had a quiet overnight trading session but continues to hold onto the strength it picked up yesterday. The currency was not able to break below the 1.1100 yesterday but it does look like it could trade there at some point today, I still favour a weaker Canadian Dollar but the Loonie may be able to extend is recent gains over the short-term.

Up today we get a slew of US economic data including the important GDP report for the 4^th quarter. We are expecting a growth rate of 2.7% which is up from the last report of 2.4%, a strong report could give the impetus to break back above the 1.1125 level today, a weak report should be enough to push USD.CAD below the 1.1100 level. Either way it should be a volatile morning.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1087			1.1139
CAD/USD		0.9019			0.8977
EUR/USD		1.3755			1.3798
EUR/CAD		1.5253			1.5372
STG/CAD		1.8423			1.842
AUD/CAD		1.0234			1.0283
CAD/JPY		92.14			91.85
CAD/CHF		0.7991			0.7951
CAD/HKD		6.9747			6.9439
CAD/CNY		5.6014			5.5758
CAD/MXN		11.8511
Commodities
Gold		$1,295.00			$1,315.00
OIL		$100.35			$99.31
US DOLLAR INDEX
P.CLOSE		80.03			79.93
OPEN		80.12			80.07
US 10YR YIELD		2.70%			2.74%