GFX Morning FX Commentary

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is 1.0840-1.0920

Today's expected range for the Canadian Dollar against the Euro is 1.4670-1.4830

Today's expected range for the Canadian Dollar against Sterling is 1.8250-1.8310

The US Dollar is again mixed as some of the currencies were all over the map last night. In the UK the Pound is stronger against the Greenback as a UK housing report showed that UK home prices were rising faster than expected, in New Zealand the Kiwi Dollar was over 1.5% higher against the US Dollar as that countries Central Bank increased interest rates to 3.25% and hinted that further interest rates hikes are most likely, The Aussie Dollar was also higher but not nearly as much as New Zealand. The Euro was lower against the US Dollar has sentiment is still building for more stimulus from the European Central Bank.

Overnight saw the situation in Iraq turn quite dire with the Islamists taking over more of the country and the Iraqi Government pleading for airstrikes from the US. It was not widely reported but the Islamists looted the Iraqi Central bank in the city of Mosul and took some $500 Million of gold from the bank. The absolute failure of US policy in Iraq has now just made the entire world a very unsafe place, there is nothing more dangerous than terrorists running around with an extra $500 Million to spend. This action is affecting the price of oil as a barrel of West Texas intermediate oil jumped $1.65 in price and will continue to bring instability to financial markets as the Iraqi oil fields are threatened.

The Canadian Dollar was one of the quietest currencies overnight, it did nothing against the US Dollar but managed some gains against the Euro, even the big jump in the price of oil was not able to help the Loonie continue to strengthen against the Greenback.

The most interesting event today for the Loonie will be the speech by Bank of Canada Governor Stephen Poloz. He is speaking on the Financial System Review but in his press conference with reporters I am sure that he will take questions on the Canadian Dollar and if recent patterns hold he will try and talk the value of the Loonie down.

I don't think the Ontario Election will have an effect on the Canadian Dollar today. I do believe that if we see a Liberal victory the bond rating agencies will drastically downgrade our debt in the coming weeks and months making it more expensive to finance the province’s debt load. When that happens I think it will become a negative influence on the Canadian Dollar.

I think we could have a busy day as events in Iraq unfold, I just hope all the currency traders are not off watching the World Cup.

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0856			1.0893
CAD/USD		0.9211			0.918
EUR/USD		1.3524			1.3528
EUR/CAD		1.4684			1.4738
STG/CAD		1.8276			1.8282
AUD/CAD		1.0215			1.0233
CAD/JPY		93.99			93.64
CAD/CHF		0.8287			0.8262
CAD/HKD		7.117			7.095
CAD/CNY		5.7255			5.7149
CAD/MXN		11.9964			12.0013
Commodities
Gold		$1,266.00			$1,262.00
OIL		$105.95			$104.47
US DOLLAR INDEX
P.CLOSE		80.8			80.8
OPEN		80.79			80.81
US 10YR YIELD		2.66%			2.65%