GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.1950-1.2020

Today’s expected range for the Canadian Dollar against the Euro is 1.4070-1.4140

Today’s expected range for the Canadian Dollar against Sterling is 1.8170-1.8240

The US Dollar is again stronger this morning led higher by a weaker Euro and Pound. Overnight the World Bank cut global growth forecasts for 2015 and 2106 which led Equity Markets lower and the Greenback higher. EURO.USD fell to a new low at 1.1740 as it continues its march lower, Sterling performed a little bit better and was actually trading higher for the session but quickly retreated on the World Bank downgrade

The price of oil was down slightly overnight but it seems to be stabilizing around the $45 a barrel price for the moment. More and more we are starting to see that this drop will be a prolonged one and the effects it will have on the Canadian economy. This morning TD made the prediction that the Federal Government will need another two years to balance the budget, there have been stories printed that Alberta could be heading for a recession and yesterday Suncor announced that they are reducing capital costs by $1B and laying off some 1,000 oil sands workers. Last week Shell announced they were laying off 600 workers, I would not want to be in the housing market in Fort McMurray at the moment. As many people have said the oil economy has gone through boom and bust cycles all through history, this bust period will pass as well but it may take a couple of years for the dust to settle.

The Canadian dollar weakened in the first half of the overnight session but was able to pull back some of those losses this morning, as I mentioned yesterday it will take a couple of runs to get through the 1.2000 level. With the Loonie weaker overnight it was not able to take advantage of the weakness in the Euro and EURO.CAD is actually higher this morning, the Loonie cannot make any sustained movement against the Euro at the moment so look for it to continue to trade between 1.400 and 1.4300.

Up today we get the US Retail Sales report for December and the market is forecasting for a 0.5% increase, if we get a strong report that might be enough to get a move above 1.1200. Either way markets will remain fearful and we will see lots of volatility for some time to come.

 

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close January 13, 2015
USD/CAD	1.1977				1.1978				1.194
CAD/USD	0.8349				0.8349				0.8375
EUR/USD	1.1749				1.1789				1.177
EUR/CAD	1.4075				1.4126				1.4058
STG/CAD	1.818				1.8135				1.8107
AUD/CAD	0.9734				0.9759				0.9753
CAD/JPY	97.59				99				98.61
CAD/CHF	0.853				0.8497				0.8539
CAD/HKD	6.4525				6.45				5.19
CAD/CNY	5.1718				5.175				5.19
CAD/MXN	12.2322				12.24				12.26
Commodities
Gold	$1,228				$1,239				$1,233.00
OIL	$45.82				$44.62				$46.20
US DOLLAR INDEX
OPEN	92.32				92.29				92.26
US 10YR YIELD	1.87%				1.89%				1.90%