GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1020-1.1080

Today’s expected range for the Canadian Dollar against the Euro is 1.4280-1.4350

Today’s expected range for the Canadian Dollar against Sterling is 1.7860-1.7920

The US Dollar is marginally stronger this morning as it was again led by a dip in the British Pound. This morning Sterling was led lower by the inflation report that showed inflation hit its lowest level in 5 years, if this trend continues over the short-term it may influence the Bank of England timing on interest rate hikes, if inflation is dropping towards deflation rates the last thing the BOE will do is increase interest rates. Sterling is also weaker on nervousness of Thursday’s Scottish independence vote, with the No side slightly ahead in the last poll it really will be a wild card. My own feeling is the No side will prevail which if I am correct will push GBP.USD and GBP.CAD higher, Sterling buyers may want to consider putting on some forwards at current levels at this time.

The Canadian Dollar had a very quiet night after it sustained a good rally yesterday, it had a sniff near the 1.1100 level first thing yesterday morning and then slowly retreated for the rest of the afternoon, I think we will be approaching levels once again where US Dollar buyers need to be ready to purchase some forwards. I still favour a break of the 1.1100 at some point and if GBP.CAD goes much higher after the Thursday vote it may pull USD.CAD higher as well.

Up today we have some secondary data out of the US and Canada so I am not expecting much action around the release. Bank of Canada Governor Poloz is speaking at 1:45 on Floating Exchange Rates, I am not sure if he is taking questions after the speech, if he does we may get the possibility that he drops a comment that would get the markets moving.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1056			1.1084
CAD/USD		0.9022			0.9022
EUR/USD		1.2941			1.2921
EUR/CAD		1.431			1.4322
STG/CAD		1.7907			1.8006
AUD/CAD		0.9971			1.0003
CAD/JPY		96.88			96.76
CAD/CHF		0.8464			0.8445
CAD/HKD		6.9894			6.9728
CAD/CNY		5.5577			5.5421
CAD/MXN		11.9734			11.9517
Commodities
Gold		$1,234.00			$1,235.00
OIL		$92.67			$91.51
US DOLLAR INDEX
P.CLOSE		84.25			84.23
OPEN		84.24			84.48
US 10YR YIELD		2.56%			2.60%