GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1450-1.1520

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 1.8000-1.8070

The overall US Dollar index is unchanged this morning in spite of a lot of overnight activity in other currencies. The Japanese Yen is by far the most active and volatile major currency this morning weakening overnight trading from 117.40 low to 118.90, the weakness in the Yen overnight (after three sessions of getting stronger) is the Japanese market repositioning itself ahead of the weekend election in which Prime Minister Abe is expected to win re-election and provide more stimulus to the ailing country.

The Aussie dollar has made new four year lows against the greenback despite their employment report which showed the headline number beating the forecast. However, the breakdown sounds too familiar with part time jobs dominating the new positions. This morning Central Bank Governor Stephens made the comment that he feels AUD.USD should be at 0.75 which is about 7 full points lower that we are currently trading (.8240).

The Russian Ruble made historic lows last night breaking USD/RUB 55. In response to the record depreciation of the Russian Ruble due to a plunge in the oil price and Western imposed sanctions on their financial system the Russian Central Bank this morning increased interest rates a full point to 10.5% but it has little effect on the Ruble as it fell to a new historic low. The value of the Ruble compared to the US Dollar has dropped 40% since Western sanctions were first introduced over their invasion of Ukraine.

The Currency with the biggest impact to the decline in oil has been the Norwegian Krone and this morning the Norwegian Central Bank cut interest rates causing a further decline in the currency. The Governor of the Central Bank stated that the country is “facing a major economic slowdown as crude prices continue to plunge”. Canadian Central Bank Governor Stephen Poloz is speaking this morning and in his press conference I am sure he will be asked about oil prices affecting the Canadian economy, we could see volatility around his comments.

The price of oil has only has a tepid rally overnight and is marginally higher this morning up from our close at 60.85 a barrel. Volatility will remain the key and a drop below $60.00 today will certainly put 1.1500 in the crosshairs for the Canadian Dollar.

In addition to Poloz speaking today we have U.S. retail sales for November with expectations for a rise of 0.3% the same as the previous month, with so much happening volatility should remain the key and we will continue to see some active moves.

 
Have a great day
Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.1476			1.1461
CAD/USD		0.8714			0.8725
EUR/USD		1.2458			1.2367
EUR/CAD		1.43			1.418
STG/CAD		1.7995			1.7923
AUD/CAD		0.9507			0.9544
CAD/JPY		103.17			104.07
CAD/CHF		0.84			0.8475
CAD/HKD		6.7335			6.7404
CAD/CNY		5.391			5.3851
CAD/MXN		12.6932			12.6005
Commodities
Gold		$1,223.00			$1,226.00
OIL		$61.58			$62.70
US DOLLAR INDEX
P.CLOSE		88.24			88.72
OPEN		88.25			88.73
US 10YR YIELD		2.15%			2.21%