GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0620-1.0670

Today’s expected range for the Canadian Dollar against the Euro is 1.4440-1.4490

Today’s expected range for the Canadian Dollar against Sterling is 1.8210-1.8260

Happy 4^th of July to all our American readers.

The US Dollar is stronger this morning as the overnight markets reacted to the strong US employment report released yesterday. The US economy created 288K new jobs in June which blew away the expectation of 215k, the Dow Jones Index  jumped above the 17,000 mark for the first time in history and the US Dollar got stronger both against the Euro and Sterling. This number caught the market a bit off guard as recent US data had been on the weak side, I think this strong number is the clearest sign that the US recovery is still moving forward.

The Canadian Dollar had a busy day yesterday, as you would expect USD.CAD jumped higher on the positive US Employment data but after it reached near the  1.0700 level the Canadian Dollar traded stronger all day and eventually USD.CAD set a new intra-day low. This just highlights how resilient the Canadian Dollar is at the moment, it also continues to trade stronger against the Euro and Sterling so it is one of the best performing currencies as of late.

With the 4^th of July holiday I am not expecting much activity today. Yesterday I mentioned some of the concerns I have about the strength in the Canadian Dollar;

-media reports highlighting how the strength in the Canadian Dollar is hurting the export markets

-Moody’s putting Ontario on credit watch which will most likely lead to a downgrade

Now with the strong US Employment report you can add a strengthening Us Dollar to the list that may turn the Loonie around. It also looks like the price of oil is stabilizing and may pull back a little but as of late the Loonie does not seem to be correlated to the price of oil so I am not sure that will have much impact on the Loonie. If I was a US Dollar buyer I would certainly be looking to protect myself my putting on some forwards at current levels.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0631			1.0645
CAD/USD		0.9406			0.9394
EUR/USD		1.3587			1.365
EUR/CAD		1.4447			1.4533
STG/CAD		1.8218			1.8245
AUD/CAD		0.9945			0.9982
CAD/JPY		95.97			95.67
CAD/CHF		0.8416			0.8354
CAD/HKD		7.2683			7.2593
CAD/CNY		5.8349			5.8348
CAD/MXN		12.194			12.1933
Commodities
Gold		$1,322.70			$1,323.90
OIL		$103.85			$104.45
US DOLLAR INDEX
P.CLOSE		80.26			79.97
OPEN		5.8349			80.07
US 10YR YIELD		2.64%			2.62%