GFX Morning Commentary

Good Morning,

Today’s expected range for Canadian Dollar against the US Dollar is 1.1600-1.1680

Today’s expected range for Canadian Dollar against the Euro is 1.4500-1.4580

Today’s expected range for the Canadian Dollar against Sterling is 1.8290-1.8370

The US Dollar is slightly higher this morning in quiet trading conditions as currency markets get ready for the US Federal Reserve announcement on interest rates. Overnight the Russian ruble fell for the 8^th straight day as President Obama readies more sanctions to be placed on Russia, in response to the crisis the Russian Central Bank announced that they would start to sell their foreign currency reserves in an attempt to stem the losses in the Ruble. Putin is expected to make a comment on the situation at some point today, I am sure that he will start to ramp up lots of rhetoric in the coming days and blame the West for everything. It will be a very cold winter in Europe if he decides to cut of Natural Gas Exports, this situation will remain quite volatile for some time to come.

Oil traded below $55.00 a barrel for the first time since 2009, the Saudi oil minister stated that OPEC will not cut production even if oil drops to $40 dollars a barrel, not very encouraging words for the global economy.

The Canadian Dollar seemed to stabilize yesterday against the US Dollar as it got back to range trading, it is a bit weaker this morning but still in recent ranges. It does continue to lose ground to both Euro and Sterling as strength in those currencies have pushed the Loonie lower. I don’t see any changes to the current situation over the short-term so look for more Loonie weakness.

Up today we get the US CPI inflation report for November, we are expecting a 0.2% drop with a year-over-year rate of 2.2% and a core reading of 2.4%, if these numbers are accurate the reading should not have any effect on the currency market. In addition this afternoon we get the Federal Reserve announcement, while there is no chance of an interest rate hike there are come economists expecting a language change regarding future interest rate hikes. In the past the Fed has kept a pledge to keep borrowing costs low for a “considerable period”, if they remove that phrase then interest rate hikes in the US cannot be that far behind and this will give the US Dollar a boost.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4:30pm December 16th Closing Rates
USD/CAD		1.1644			1.1649				1.1629
CAD/USD		0.8588			0.8584				0.8599
EUR/USD		1.2455			1.2538				1.2515
EUR/CAD		1.4504			1.4611				1.4555
STG/CAD		1.8309			1.8343				1.8309
AUD/CAD		0.9535			0.9603				0.956
CAD/JPY		100.54			99.27				100.05
CAD/CHF		0.8278			0.8219				0.8249
CAD/HKD		6.6385			6.633				6.6473
CAD/CNY		5.321			6.1908				5.3227
CAD/MXN		12.6616			12.735				12.6707
Commodities
Gold		$1,199.70			$1,202.10				$1,196.15
OIL		$54.83			$54.44				$55.95
US DOLLAR INDEX
OPEN		88.44			87.88				88.07
US 10YR YIELD		2.09%			2.06%				2.05%