GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1100-1.1170

Today’s expected range for the Canadian Dollar against the Euro is 1.4060-1.4120

Today’s expected range for the Canadian Dollar against Sterling is 1.7970-1.8050

The US Dollar is mixed this morning as it is unchanged against the Euro (after trading weaker during the night) and it is stronger against Sterling. Overall the Dollar index fell the most it has in two weeks with the commodity currencies being the biggest beneficiaries of the overnight move. Up today we should again see volatility on the rise as we get the European Central Bank reporting on interest rates, I will not be surprised that given the current situation in Europe if Governor Draghi announces more stimulus to try and push the economy forward, as I write the ECB has left interest rates unchanged but markets will be waiting for his press conference later this morning.

As mentioned above the commodity currencies were the biggest gainers last night led by the Canadian Dollar as USD.CAD dropped almost 100 points during the overnight session in Asia. When the London market opened USD.CAD moved back a bit higher, companies that had US Dollar buy orders in place were able to take advantage of this move. On the surface of it there is no apparent reason for the Loonie to have rallied so much, I am not convinced that we have seen a change in the strong US Dollar trend and I think this is just the pullback we were looking for before another move higher, markets rarely move in a straight line for an extended period of time so this type of move is not uncommon.  I can’t say enough times that US buyers need to be ready with their orders  to take advantage of these types of moves, they are not occurring all that often and you need to be ready, the trend is still for USD.CAD to go higher.

In addition to the ECB we have the US Factory orders for August due out this morning, yesterday saw the release of the US ISM manufacturing data disappoint the market so I think traders will pay a little extra attention to this Factory number, a disappointing report may give USD.CAD a push lower in the short-term. Either way I think we will be in for a volatile morning.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1121			1.121
CAD/USD		0.8992			0.892
EUR/USD		1.2636			1.2596
EUR/CAD		1.4055			1.4123
STG/CAD		1.7955			1.816
AUD/CAD		0.9761			0.9753
CAD/JPY		97.63			97.94
CAD/CHF		0.8593			0.8546
CAD/HKD		6.9602			6.9035
CAD/CNY		5.5181			5.4735
CAD/MXN		12.0877			12.0061
Commodities
Gold		$1,214.00			$1,209.00
OIL		$88.71			$92.90
US DOLLAR INDEX
P.CLOSE		85.92			85.93
OPEN		85.79			86.1
US 10YR YIELD		2.40%			2.48%