GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2600-1.2670

Today’s expected range for the Canadian Dollar against the Euro is 1.4300-1.4370

Today’s expected range for the Canadian Dollar against Sterling is 1.9490-1.9560

The US Dollar is marginally stronger this morning as the markets get set for Federal Reserve Chairperson Janet Yellen’s testimony before the Senate, market watchers will be looking for any hints on the next interest rate hike and her overall view on the US economy. Last week’s FOMC minutes were more dovish than expected so there may be many questions asked of Yellen in the face of a possible slowdown in the US economy.

Overnight the Euro trades slightly weaker, Greece was delayed in getting the plan for their new reforms over to the EU which must now review these reforms to make sure Greece qualifies for the 4-month loan extension they were looking for. In the UK Sterling has remained supported overnight as a Bank of England official stated that the Bank could raise interest rates sooner than expected, certainly Sterling has been on a great run lately and I think it will be only a matter of time before GBP.CAD hits the 2.0000 level.

The Canadian Dollar continues to lose ground to the Greenback as the brutal Retail Sales report and an expected interest rate cut in March continues to weigh on the Loonie, it is not a pretty picture for the Loonie at the moment. That quick dip in USD.CAD we had yesterday on the Nigerian Oil Minister comments about OPEC having a meeting on oil production were very short-lived but just show how sensitive the currency market is to any comments on the oil market.

Up today we get s set of US secondary data but the markets will focus on what Yellen has to say. In Canada, Bank of Canada Governor Stephen Poloz will be speaking at the University of Western Ontario and the Canadian markets will be looking for any hints of more rate cuts to come. With two central bankers speaking today volatility will be at a premium.

We are now in bank earnings season and the first to report this morning was BMO which reported a 5% drop in profits, with the drop in the price of oil and the rising prospects of a housing bubble out West the banks are expected to report reduced earnings so brace your business for fee increases. Long time readers will now that I have always maintained that they only way to protect your business from the exorbitant bank fees that we as business owners pay is to own the stock and use the dividends to offset the high fees.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Monday
USD/CAD		1.2632			1.2594			1.2575
CAD/USD		0.7916			0.794			0.7953
EUR/USD		1.1319			1.1309			1.133
EUR/CAD		1.4301			1.4243			1.4249
STG/CAD		1.9508			1.9342			1.9439
AUD/CAD		0.9796			0.9814			0.981
CAD/JPY		94.59			94.5			94.65
CAD/CHF		0.7512			0.7535			0.7555
CAD/HKD		6.1172			6.1351			6.1351
CAD/CNY		4.9512			4.9655			4.9733
CAD/MXN		11.9839			12.0019			12.0019
Commodities
Gold		$1,198			$1,193			$1,193
OIL		$49.75			$49.63			$49.63
US DOLLAR INDEX
OPEN		95.82			94.89			94.66
US 10YR YIELD		2.09%			2.13%			2.07%