GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0800-1.0850

Today’s expected range for the Canadian Dollar against the Euro is 1.4750-1.4800

Today’s expected range for the Canadian Dollar against Sterling is 1.8410-1.8460

The US Dollar is marginally weaker this morning as the currency markets react to the US Federal Reserve statement from yesterday. In the announcement the Fed stated that they will not be increasing interest rates for a “considerable time” and they downgraded US GDP growth rates for 2014, despite inflation rates that may be climbing the US has ruled out any interest rate hikes until at least 2017 at the earliest. Overnight the Dollar dropped to its lowest level in a month and looks set to trade a bit weaker over the day. The lack of movement by the Fed is also having the effect of helping to reduce overall volatility in the FX markets,  as we have seen with the USD.CAD exchange  rate there is very little movement at all and this is the case with a wide group of currency pairs, overall volatility in the FX markets has dropped to a 7-year low.

The Pound rose to its highest level in 5 years against the US Dollar being pushed by the weak US Dollar overnight and this was despite an unexpected drop in UK retail sales this morning

The Canadian Dollar was able to benefit from the weak US Dollar and was able to extend some gains last night and USD.CAD reached the previous low that we saw in early May, given the lack of volatility I am not sure we will see much extension of this move today but at least we had a busy night for a change.

Up today we have some secondary US data throughout the morning so we could have a little volatility. I look for USD.CAD to settle in around these new levels and eventually set up for a test of the 1.0800 level.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0815			1.0863
CAD/USD		0.9246			0.9206
EUR/USD		1.3625			1.3564
EUR/CAD		1.4743			1.4737
STG/CAD		1.0418			1.8402
AUD/CAD		1.0185			1.0148
CAD/JPY		94.12			94.07
CAD/CHF		0.8253			0.8266
CAD/HKD		7.1434			7.1143
CAD/CNY		5.754			5.7334
CAD/MXN		12.0346			12.0665
Commodities
Gold		$1,282.00			$1,272.00
OIL		$106.41			$106.67
US DOLLAR INDEX
P.CLOSE		80.41			80.63
OPEN		80.23			80.55
US 10YR YIELD		2.58%			2.64%