GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1280-1.1330

Today’s expected range for the Canadian Dollar against the Euro is 1.4120-1.4170

Today’s opening range for the Canadian Dollar against Sterling is 1.7970-1.8040

The Us Dollar is marginally weaker this morning as the Greenback continued to give back some gains on the slightly disappointing US Jobs report. The British Pound rose for the 2^nd straight day as data this week in the UK is expected to show that unemployment is falling while wages are rising. Overall the Pound should continue to trade weak as inflation is expected to remain subdued and the Bank of England is expected to reduce its growth targets for the rest of the year.

In other overnight news both Aussie and Kiwi Dollars are stronger as the Chinese economy reported better than expected exports. While the Chinese economy is slowing I think most currency trades are a bit relieved that the slowdown is not a fast drop and seems to be more orderly. In Prime Minister Harper’s recent trip to China an announcement was made that Canada is establishing a Chinese Yuan trading Hub here in Canada. Here is the link the Bloomberg article, http://bloom.bg/1skwiS0 I am not quite sure yet what the mechanics are but it should make it much easier to buy Chinese Yuan with Canadian Dollars instead of using US Dollars, this will make it much easier for Canadian companies to do business in China.

The Canadian Dollar has held onto its gains from the strong Jobs report on Friday, these strong job numbers (over 100k in the last two months) are not adding up for me as we are not seeing any real growth in the Canadian economy. That being said it is still a good news story and we could see the Loonie continue to show some strength.

This week’s economic news is very light on activity, it is highlighted by the US Retail Sales report on Friday and some secondary manufacturing data out of Canada. If the Loonie can continue to garner some strength from the positive Jobs report than we may see USD.CAD drop back into the mid 1.1200’s, if the overall strong US Dollar trend remains intact then USD.CAD will push back up towards 1.1400.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1304			1.1436
CAD/USD		0.8846			0.8749
EUR/USD		1.2487			1.239
EUR/CAD		1.4117			1.4173
STG/CAD		1.7987			1.8098
AUD/CAD		0.979			0.9824
CAD/JPY		100.48			100.72
CAD/CHF		0.8519			0.8492
CAD/HKD		6.8382			6.756
CAD/CNY		5.411			11.9228
CAD/MXN		11.9821
Commodities
Gold		$1,168.00			$1,144.00
OIL		$79.66			$78.15
US DOLLAR INDEX
P.CLOSE		87.63			88
OPEN		87.31			88.15
US 10YR YIELD		2.29%			2.39%