GFX Morning Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0840-1.0890

Today's expected range for the Canadian Dollar against the Euro is 1.4720-1.4770

Today's expected range for the Canadian Dollar against Sterling is 1.8400-1.8460

The US Dollar is marginally higher this morning as the currency markets get ready for the US Federal Reserve interest rate announcement this afternoon. Overnight Sterling was lower on the release of the Bank of England policy minutes from their last meeting, the minutes showed the committee are opposed to any short-term increase in interest rates.

With the Fed announcement today we are not expecting any changes to the interest rate policy and we expect no change to the reduction of their stimulus plan which is currently pegged at $10 Billion a month. It will be interesting to see if they comment on the timing of future interest rate increases, with the jump in inflation yesterday and the recovery progressing it would not be totally unexpected that they talk about increasing interest rates sooner than later.

In Iraq the Islamist  rebels have taken control of the oil fields north of Baghdad so the pressure on the price of oil will stay supported by this situation, to date the Canadian Dollar has no correlation to the price of oil, but if oil really spikes in the coming days the Loonie should benefit.

In Canada the Northern Gateway pipeline has received government approval but subject to numerous conditions. Given that this pipeline now needs provincial and aboriginal approval it will be a very long time (if ever) before the oil flows. When you consider all the lawsuits that will now start regarding the environment I think it realistic that it could be 5-10 years before construction even starts.

Nothing to report on USD.CAD, it continues to trade in very tight ranges both overnight and during the day. The Loonie is holding onto its strength against the Euro but has not been able to extend those gains as the Euro has made some ground back against the US Dollar over the last few days.

In addition to the US Federal Reserve we have Canadian Wholesale trade for the month of April, I doubt that this will affect the market so things should remain quiet ahead of the Federal reserve announcement. If we see any surprises from the Fed I will send out a currency alert otherwise I will comment on the announcement in tomorrow’s commentary.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0863			1.0856
CAD/USD		0.9206			0.9211
EUR/USD		1.3564			1.3566
EUR/CAD		1.4737			1.4731
STG/CAD		1.8402			1.8492
AUD/CAD		1.0148			1.0161
CAD/JPY		94.07			93.88
CAD/CHF		0.8266			0.827
CAD/HKD		7.1143			7.1181
CAD/CNY		5.7334			5.731
CAD/MXN		12.0665			12.0356
Commodities
Gold		$1,272.00			$1,266.00
OIL		$106.67			$106.28
US DOLLAR INDEX
P.CLOSE		80.63			80.45
OPEN		80.55			80.5
US 10YR YIELD		2.64%			2.59%