GFX Morning Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2565-1.2640

Today’s expected range for the Canadian Dollar against the Euro is 1.4280-1.4360

Today’s expected range for the Canadian Dollar against Sterling is 1.8970-1.9050

The US Dollar is mixed this morning, it is unchanged against the Euro and Canadian Dollar and a little weaker against Sterling and Yen. The big surprise overnight is the Reserve Bank of Australia unexpectedly cutting their interest rates by a quarter point to 2.25%. Much like the Canadian Dollar when the Bank of Canada did its surprise cut the Aussie Dollar lost 2% on the announcement, the RBA made the statement that they felt the Aussie Dollar was overvalued on local markets. It appears the global currency war is now in full swing as each country races to weaken their currency the fastest, first country to the bottom wins.

Oil continues to push higher as there are reports that US Shale producers are going offline and decreasing the supply. I am not convinced that this is a reversal in the oil price, I rather think it is oil traders covering their short position and waiting for the oil market to heat up again,  I think there is too much uncertainly in the global economy to all of a sudden have the price of oil start a sustained opportunity.

Even though the Canadian Dollar is basically unchanged this morning it did have a wild ride overnight, USD.CAD first jumped higher on the interest rate cut in Australia and then the Loonie recovered when the oil price jumped above $50 dollars a barrel. If oil can sustain the $50 threshold for a while then I think we will see USD.CAD drop a little lower, if the oil price quickly drops again, USD.CAD will move higher and look to set new highs in the coming weeks.

Up today we have some secondary data out of the US, markets will pay particular attention to the Richmond Fed Index to see what is happening with the US economy, any  further signs (confirming the poor GDP report) that the US economy is slowing should lead to the expectation that the US Federal Reserve may delay their interest rate rise.

Have a great day

Mike

 

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm Monday close
USD/CAD	1.2557				1.267				1.2575
CAD/USD	0.7963				0.7892				0.7952
EUR/USD	1.1351				1.1324				1.1335
EUR/CAD	1.4257				1.435				1.4258
STG/CAD	1.8933				1.9035				1.8896
AUD/CAD	0.9628				0.9887				0.9813
CAD/JPY	93.41				92.78				92.7800
CAD/CHF	0.7373				0.7346				0.7367
CAD/HKD	6.1506				6.0956				6.0956
CAD/CNY	4.9795				4.9388				4.9741
CAD/MXN	11.798				11.7961				11.8442
Commodities
Gold	$1,285.00				$1,276.00				$1,274.00
OIL	$51.20				$49.25				$49.75
US DOLLAR INDEX
OPEN	94.47				94.70				94.6
US 10YR YIELD	1.72%				1.67%				1.67%