GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0950-1.1020

Today's expected range for the Canadian Dollar against the Euro is 1.5220-1.5290

Today's expected range for the Canadian Dollar against Sterling is 1.8500-1.8570

The US Dollar is marginally stronger this morning as worries in Europe and China have increased investor demand for safe haven assets. In Europe the EU Commission has downgraded their expectation for inflation and growth over the next two years,  well below their desired targets.‎ The Commission also stated that if the situation in Ukraine worsens that it could have a very negative effect on the very fragile Euro-Zone economy. As long as inflation remains at current levels all of these heavily indebted EU countries will see their growth rate stagnate, debt to GDP rise and the risk of default grow. With this negative news it is hard to imagine the Euro going on a great run anytime soon.

In China a manufacturing index came in lower than expected continuing the string of poor economic data coming out of that country, the Yen was able to garner some strength as money flowed out of the rest of Asia and back home for safe keeping.

The Canadian Dollar is still confined to narrow ranges against the US Dollar, any momentum that it had late last week quickly vanished Friday morning on the strong US Employment report, USD.CAD jumped almost 50 pips in the blink of an eye after the announcement, underlying my fear that any Canadian Dollar weakness down the road will be quick and violent. Overnight the Loonie did manage to recover a little as it get sets up for the Canadian Employment report on Friday.

Up today we do have some trade data in both Canada and the US set to be released, given the momentum that the US Dollar had after Friday’s Employment report I would expect that we may test the higher early on, US Dollar buyers still need to protect themselves against any moves back towards 1.1100 in the coming weeks.

Have a great week

Mike

 

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0972			1.0961
CAD/USD		0.9114			0.9123
EUR/USD		1.3871			1.386
EUR/CAD		1.5222			1.5195
STG/CAD		1.8508			1.8483
AUD/CAD		1.0165			1.0143
CAD/JPY		92.9			93.49
CAD/CHF		0.7994			0.8019
CAD/HKD		7.0591			7.0668
CAD/CNY		5.687			5.7085
CAD/MXN		11.897			11.9306
Commodities
Gold		$1,312.00			$1,288.00
OIL		$100.31			$99.83
US DOLLAR INDEX
P.CLOSE		79.57			79.53
OPEN		79.5			79.57
US 10YR YIELD		2.57%			2.63%