GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2280-1.2380

Today’s expected range for the Canadian Dollar against the Euro is 1.4340-1.4440

Today’s expected range for the Canadian Dollar against Sterling is 1.8730-1.8830

The US Dollar is marginally weaker this morning as the world‘s financial markets get ready for the big announcement from the European Central Bank. There were reports surfacing yesterday that the stimulus program will involve the ECB buying back some €50B worth of bonds every month to the end of 2016, about a trillion worth of Euro purchases. I honestly don’t know what the market is expecting but the way Central Banks have been acting lately I won’t be surprised if they throw the market a curve ball. When the US Federal Reserve did their stimulus program they bought US Government Treasuries back, the Bank of England is buying back UK sovereign debt bonds but I am not sure just how the ECB will implement their program, the ECB does not issue debt instruments so they may in fact have to get every members Central Bank to buy back their debt, or they could buy back all member government debt on a percentage basis depending on the size of the member country, I wonder if they will buy back any Greek debt?

Not much to say about the Canadian Dollar this morning, I think the Bank of Canada took care of that and now we should see USD.CAD move higher in the coming weeks, I see nothing on the short-term horizon that will be positive for Canada. I will be very interested in this spring Federal budget, if the Conservatives  area going to hold their prediction of a surpluses they are going to have to make massive cuts to spending.

Other than the EU announcement nothing of note today, if the ECB announcement comes close to market expectation then I think we will see a rebound in the Euro today, if it fails to impress the EURO.USD is on its way to 1.1000. The Loonie should have another volatile day just on the back of any changes to EURO.CAD.

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm Close January 21, 2015
USD/CAD	1.2335				1.2087				1.2087
CAD/USD	0.8107				0.8273				0.8273
EUR/USD	1.164				1.1578				1.1578
EUR/CAD	1.4345				1.3991				1.4302
STG/CAD	1.8717				1.8285				1.8659
AUD/CAD	1.0013				0.9921				0.9980
CAD/JPY	95.34				97.27				95.4300
CAD/CHF	0.6934				0.7155				0.6970
CAD/HKD	6.2665				6.3943				6.2604
CAD/CNY	5.0336				5.1384				5.0343
CAD/MXN	11.9379				12.1351				11.9900
Commodities
Gold	$1,286				$1,298				$1,294.00
OIL	$48.71				$46.78				$47.61
US DOLLAR INDEX
OPEN	92.87				92.73				92.84
US 10YR YIELD	1.91%				1.81%				1.86%