GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0625-1.0680

Today’s expected range for the Canadian Dollar against the Euro is 1.4520-1.4600

Today’s expected range for the Canadian Dollar against Sterling is 1.8220-1.8300

The US Dollar is marginally stronger this morning but for the most part is unchanged as the market awaits the US Employment report and the European Central Bank announcement. The big mover overnight was the Australian Dollar which dropped almost .2% against the US Dollar, the Aussie Retail Sales report came in much worse than expected but also the Aussie dollar fell on Central Bank comments that talked down the value of the currency.

Up this morning we do get the ECB interest rate policy announcement and after their big move last month to negative deposit rates we are not expecting much movement by the Central Bank this morning. It is a bit early to see if the new program is having the desired effect on the European economy but investors will be watching Draghi’s press conference to get any hints of further stimulus programs.

The Canadian Dollar had a quiet night and opens up this morning where we left it last night, trading in the Loonie will be dominated by today’s US employment report where we are expecting 210K new jobs to have been created in June after 217K new jobs were created in May.  Given the poor bouts of US economic data recently any number less than consensus will push USD.CAD lower and the inter-bank rate will test the 1.0600 level at some point, it will take a huge push to get through that level but it is possible on a very poor US number.

If you are a US Dollar buyer I would be looking at putting on some forward contracts at current levels, over the past couple of days we have seen lots of negative Canadian Dollar reports in the media. Both the Globe& Mail and the National Post have run articles questioning the rise in the Canadian Dollar and this morning and Moody’s this morning has  put Ontario on credit watch saying that the likelihood of the Ontario Government hitting their debt targets is less likely given their current spending patterns. They have kept Ontario’s bond rating at AA2 but a downgrade is more likely now which will of course make the cost of funding a deficit more expensive. Even if the Loonie continues to strengthen prudence would dictate US Dollar buyers to take some profit off the table at the moment.

A quick reminder that tomorrow is the US July 4ht holiday so the wire system will be closed, if you need to do any wires make sure you get the orders in early today, the market will be very quiet this afternoon and tomorrow.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0645			1.0628
CAD/USD					0.9409
EUR/USD		1.365			1.3661
EUR/CAD		1.4533			1.4523
STG/CAD		1.8245			1.8239
AUD/CAD		0.9982			1.0051
CAD/JPY		95.67			95.44
CAD/CHF		0.8354			0.8356
CAD/HKD		7.2593			7.2699
CAD/CNY		5.8348			5.8424
CAD/MXN		12.1933			12.1716
Commodities
Gold		$1,323.90			$1,327.90
OIL		$104.45			$105.07
US DOLLAR INDEX
P.CLOSE		79.97			79.87
OPEN		80.07			79.89
US 10YR YIELD		2.62%			2.55%