GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1560-1.1640

Today’s expected range for the Canadian Dollar against the Euro is 1.4230-1.4290

Today’s expected range for the Canadian Dollar against Sterling is 1.8120-1.8180

The US Dollar is marginally stronger as once again the Japanese Yen dominated the FX markets. The Bank of Japan announced that they will increase their stimulus program to further flood the market (by buying government bonds) with cheap money in the hope that the economy will improve. In the UK, Sterling was a bit weaker as UK Government borrowing reported to increase last month and the Euro (which has taken a backseat these past weeks to other world events) remained  weak as the expectation is that the ECB will announce a massive stimulus program next month. You can see the divergence between Europe and the US really starting to emerge, Europe is just looking to start a stimulus program while the US has ended theirs and is looking to increase interest rates next year.

The Russian Ruble has rallied a little as 17% interest rates start to have a positive effect on the Ruble, investors who borrowed money to short the Ruble are forced to buy back those positions as they cannot afford to pay the interest rates to hold the positions. Of course the rest of the economy will be destroyed by the high interest rates but at least the Ruble will get a bit stronger.

The Canadian Dollar has a quiet night and the inter-bank rate continues to trade in a narrow range. With the price of oil stabilizing for the moment between $55 and $59 the Loonie should settle down as well. We still favour a test higher for USD.CAD but positive economic data should start to help the Loonie a little.

Up today we have both the Canadian Retail Sales report for October and the CPI report for November, Canada could use some very positive numbers after the beating the Loonie has taken the last few weeks, the Loonie has stemmed the losses against the US Dollar for the moment and it would be nice to see a bit of a pullback.

 

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4:30pm December 18th Closing Rates
USD/CAD		1.1594			1.158				1.1593
CAD/USD		0.8625			0.8636				0.8625
EUR/USD		1.2271			1.231				1.2285
EUR/CAD		1.4279			1.4259				1.4242
STG/CAD		1.8125			1.8131				1.8167
AUD/CAD		0.9472			0.9479				0.947
CAD/JPY		102.94			102.39				102.38
CAD/CHF		0.8457			0.8441				0.845
CAD/HKD		6.6678			6.675
CAD/CNY		5.3662			5.3163
CAD/MXN		12.587			12.5343
Commodities
Gold		1197			1205
OIL		54.95			57.75
US DOLLAR INDEX
OPEN		89.39			89
US 10YR YIELD		2.2			2.18