GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1160-1.1260

Today’s expected range for the Canadian Dollar against the 1.4170-1.4270

Today’s expected range for the Canadian Dollar against Sterling is 1.7970-1.8070

The US Dollar is stronger today as the stock market meltdown yesterday has pushed investors into the safe haven of US Treasury Bills. Yesterday afternoon ECB Governor Draghi made the statement that the ECB will not be introducing any further stimulus until individual member countries got their fiscal deficits under control. As this will never happen in my lifetime the Euro region is in a whole heap of trouble, in reaction to this statement the Dow Jones Industrial Average was done 334 points and as I write it is pointing down another 70 points on the opening. With concerns about global growth back front and centre it looks like stocks are in for another very ugly October, on October 19^th, 1987 the Dow Jones dropped 508 points (22.61%) which is the single biggest percentage drop in history, could we see this kind of drop again this month? For some reason stock markets do not like the month of October.

The Canadian Dollar was weaker overnight and factors are lining up once again to conspire against the Loonie. Stocks are dropping, price of oil is dropping dramatically and today if we get  a disappointing Employment report I could easily see USD.CAD trade up at 1.1300. I look back fondly to the summer when volatility was at a premium, boy how the tables have turned.

Up today we do get some secondary US data but the Canadian market will be dominated by the Bank of Canada Business Outlook survey and the Canadian Employment report for September. For the Employment report the market is expecting some 20k new jobs to have been created but as we have seen in the last year or two the bank economists cannot get close to getting this number correct. A strong number will push USD.CAD back towards 1.1150 and a weak number will push the rate higher, if we have job losses then I think the rate will jump close to 100 points right away and  the market will get very ugly.

This will be my last commentary for a couple of weeks, after a stressful summer selling the business I am taking Mrs. Smith on a cruise down to the Panama Canal, in my absence Rich will pull double duty and publish the commentary.

Have a great Thanksgiving, living in Canada we have many things to be thankful for

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.12			1.11
CAD/USD		0.8929			0.9004
EUR/USD		1.2662			1.2754
EUR/CAD		1.4179			1.416
STG/CAD		1.7964			1.7991
AUD/CAD		0.9759			0.9857
CAD/JPY		96.23			96.98
CAD/CHF		0.8527			0.8552
CAD/HKD		4.9092			6.9645
CAD/CNY		5.4741			5.5205
CAD/MXN		12.0556			11.997
Commodities
Gold		$1,222.00			$1,229.00
OIL		$84.56			$87.28
US DOLLAR INDEX
P.CLOSE		85.54			85.25
OPEN		85.7			85.11
US 10YR YIELD		2.30%			2.30%