GFX Morning FX commentary, October 5th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9860-.9960
 

Today expected range for the Canadian Dollar against the Euro is 1.2740-1.2840

Today’s expected range for the Canadian Dollar against Sterling is 1.5850-1.5950

The US Dollar is unchanged this morning as the currency markets line up for the release of US unemployment report later this morning. Overnight markets were quiet but did see the news that the Central Bank of Japan announced they would not provide any further stimulus to their economy and the Euro market did not react to a report that showed German factory orders fell 1.3% last month. In his speech yesterday ECB Governor Draghi reiterated that he will do what is necessary to support the Euro and he is ready to start buying sovereign bonds at any time. The Euro did receive a bit of a boost from his press conference and at the moment looks like it wants to remain above the 1.3000 level against the Greenback.

Markets today will focus on the US employment report, we are expecting 111K new jobs to have been created and the unemployment rate to move higher to 8.2% from 8.1%, if correct this should  give Romney more ammunition to fire against Obama on the economy. If the number comes in below expectation then look for the US equity markets to get hit and the US Dollar will jump higher on the safe haven effect.

The Canadian Dollar is virtually unchanged from where we left it yesterday, the Canadian markets is very quiet ahead of the Canadian employment report. In Canada we are expecting 15K new jobs to have been corrected and an unemployment rate of 7.3%, as in the US if the  Canadian number comes in worse than expected we will see USD.CAD jump higher and if we see the number create more jobs than expectation then look for USD.CAD to break lower, either way I am hopeful  this report will bring some volatility to the market and create opportunities to get some better rates.

Our Office will be closed on Monday for Thanksgiving but the Canadian Dollar will of course be trading on the international markets, make sure you get your orders in early today, as we have seen quite often the Loonie can have excessive movements on Canadian holidays and you want to make sure you take advantage of this.

From everyone at GFX thanks for your support and have a great holiday weekend

Mike

GFX Morning Currency Rates
Friday October 05, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9807			0.9858
CAD/USD		1.0192			1.0144
EUR/USD		1.3007			1.2947
EUR/CAD		1.2784			1.2762
STG/CAD		1.5871			1.5882
AUD/CAD		1.005			1.0048
CAD/JPY		79.87			79.65
CAD/CHF		0.9496			0.9488
CAD/HKD		7.8988			7.8588
CAD/CNY		6.4538			6.4265
CAD/MXN		13.0164			12.97
Commodities
Gold		$1,792			$1,790
OIL		$90.76			$88.77
Option Volatility
Canada
O/N		7.80%			9.51%
1 Week		7.66%			7.56%
1 Month		7.15%			7.31%

 

GFX Morning FX Commentary October 4th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9820-.9900

Today’s expected range for the Canadian Dollar against the Euro is 1.2740-1.2840

Today’s expected range for the Canadian Dollar against Sterling is 1.5850-1.5950

The US Dollar is marginally weaker this morning as the Euro and Sterling both rallied ahead of their respective central bank announcements on interest rates. As I write, the Bank of England announced that they were holding interest rates steady at 0.25% and not making any changes to their Quantative Easing program. It is interesting to see the different views that central bankers take, in the UK the Bank of England continues to flood the economy with cheap cash even as inflation rises above their target rates. Here in Canada we have seen the Bank of Canada ever the inflation fighter, if inflation was to rinse then interest rate hikes would follow right behind to keep inflation in check, I think this highlights the difference between the Bank of England and the Bank of Canada.

Late r this morning the European Central Bank will announce their interest rate strategy and after cutting rates 0.25% last month the market is expecting the ECB to keep interest rates at present levels of 0.75%. The markets will look to Governor Draghi’s press conference later in the morning for guidance on the Euro economy and in particular an answer to the will they or won’t they apply for a bailout Spanish question. I think markets will also look for further explanations on Draghi’s bond buying program, last month to protect the Euro from a free fall Draghi got very tough and came out and said that he will protect the Euro at all cost and announced an unlimited bond buying program to protect the Euro, to date the rhetoric has worked for him but there are no indications that the ECB has followed through and actually bought any bonds. I think this could be a very interesting press conference.

The Canadian Dollar is basically unchanged from yesterday’s close as the market awaits the ECB press conference. Of interest to me yesterday was the fact that price of oil dropped over $4 yesterday and the Loonie hardly moved. This to me highlights that the fact that the Canadian Dollar is not correlated to the price of oil at the  moment but is focusing more on equity markets, when equities retreat USD.CAD rises(Loonie gets weaker) and when equities rally USD.CAD falls and the Loonie strengthens. If you are holding off doing a trade for a moment keep your eyes on trends in the equity markets, it should give you a good idea of which way the Loonie should move.

For today barring any surprises from the ECB we should see USD.CAD continue to trade back in forth in tight ranges, markets should quiet down in the afternoon as  I think the market will setup for tomorrow’s US and Canadian employment reports.

Have a great day

Mike

GFX Morning Currency Rates
Thursday October 04, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9858			0.9863
CAD/USD		1.0144			1.0139
EUR/USD		1.2947			1.2915
EUR/CAD		1.2762			1.2739
STG/CAD		1.5882			1.5897
AUD/CAD		1.0048			1.0053
CAD/JPY		79.65			79.27
CAD/CHF		0.9488			0.9444
CAD/HKD		7.8588			7.8571
CAD/CNY		6.4265			6.4127
CAD/MXN		12.97			13.0704
Commodities
Gold		$1,790			$1,782
OIL		$88.77			$91.44
Option Volatility
Canada
O/N		9.51%			9.57%
1 Week		7.56%			7.21%
1 Month		7.31%			7.11%

GFX Morning FX Commentary October 3rd, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9800-.9875

Today’s expected range for the Canadian Dollar against the Euro is 1.2710-1.2800

Today’s expected range for the Canadian Dollar against Sterling is 1.5870-1.5850

The US Dollar is weaker against the Euro this morning but stronger against the Canadian Dollar which is something we usually don’t see. In Europe, the Euro rallied stronger on a positive Retail Sales report and the growing expectation that Spain will shortly ask for a full EU bailout. The optimism was short-lived as a poor Service Industry report showed the EU economy is still contracting. Euro markets were also squaring up ahead of the EU interest rate announcement due out tomorrow morning, currency traders will continue to look to Governor Draghi’s press conference to understand what he thinks about the EU economy.

The Canadian Dollar is weaker against the USD as USD.CAD looks like it wants to break above the .9850 level for the first time in a while. The Loonie and other commodity currencies traded weaker when the Chinese government reported a declining  services sector, the so called commodity economies (Canada, Australia, New Zealand)  are generally perceived to be at a greater risk to a slowdown in the Chinese economy, any poor economic reports out of China will continue to weigh on the Loonie.

This morning we are awaiting the release of the Fed’s minutes from their last meeting, the one in which they announced QE3, I think market pundits will be looking for any discourse among the committee about the US economy. We also get the US ISM non-manufacturing report and the ADP employment report (140k new jobs expected) so we may continue to have an active morning. I am not sure tonight’s 1^st Presidential will have any effect on the currency markets, it certainly looks that it is Obama’s election to lose, only a Romney rise from the ashes will get any notice from currency traders.

For today we should see USD.CAD move a bit higher to start the day, if you have been holding off waiting for better levels to see some USD I would suggest that you look at this move and think about leaving some orders, if we continue up to .9900 you might want to take advantage of that move, we have seen in the past just how quickly the Canadian Dollar can recover so you don’t want to miss this opportunity.

 

Have a great day

Mike

GFX Morning Currency Rates
Wednesday October 03, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9863			0.9817
CAD/USD		1.0139			1.0186
EUR/USD		1.2915			1.2924
EUR/CAD		1.2739			1.2688
STG/CAD		1.5897			1.5862
AUD/CAD		1.0053			1.0096
CAD/JPY		79.27			79.52
CAD/CHF		0.9444			0.953
CAD/HKD		7.8571			7.89
CAD/CNY		6.4127			6.4392
CAD/MXN		13.0704			13.06
Commodities
Gold		$1,782			$1,782
OIL		$91.44			$92.63
Option Volatility
Canada
O/N		9.57%			11.05%
1 Week		7.21%			7.89%
1 Month		7.11%			7.29%

GFX Morning FX Commentary Oct 2nd, 2012

Good Morning.

Today’s expected range for the Canadian Dollar against the US Dollar is .9780-.9875

Today’s expected range for the Canadian Dollar against the Euro is 1.2685-1.2750

Today’s expected range for the Canadian Dollar against Sterling is 1.5850-1.5950

The US Dollar is marginally weaker this morning in quiet trading conditions. The big mover overnight was the Australian Dollar where the Reserve Bank of Australia unexpectedly lower its key interest rates by 0.25% to 3.25%, its lowest level since 2009, in their comments they also announced that the resource boom that fueled the countries growth over the past 20 years may come to a quicker end than they had previously thought. This bears watching in the Canadian markets, Australia is very dependent on Chinese demand, Canada  a little less so as most of our energy exports head to the USA but China still plays a big role in the Canadian economy, if Australia is going to experience a slowdown then how far behind can Canada be?

Financial markets this morning have been distracted by the announcement that the State Attorney General of New York is suing JP MorganChase for mortgage fraud in their Bear Stearns unit, which they were forced to buy at the time of the 2008 financial system collapse by the Federal Government. This will be a multi-billion dollar lawsuit (very similar to what Bank of America just settled) and will most likely go on for years, but once again it will shine the spotlight on the US financial system.

Nothing new to report on the Canadian Dollar, it continues to hang around the.9800 level with very little interest in moving one way or another. With no major economic releases this morning it is unlikely that today will be a breakout day for the Loonie, with equities once again poised to have a strong day I would think that USD.CAD would move a little lower at some point but nothing of significance.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday October 02, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9817			0.9828
CAD/USD		1.0186			1.017
EUR/USD		1.2924			1.2893
EUR/CAD		1.2688			1.2672
STG/CAD		1.5862			1.5865
AUD/CAD		1.0096			1.0165
CAD/JPY		79.52			79.28
CAD/CHF		0.953			0.9553
CAD/HKD		7.89			7.8664
CAD/CNY		6.4392			6.3927
CAD/MXN		13.06			13.081
Commodities
Gold		$1,782			$1,771
OIL		$92.63			$91.93
Option Volatility
Canada
O/N		11.05%			11.03%
1 Week		7.89%			7.90%
1 Month		7.29%			7.25%

GFX Morning FX Commentary October 1st, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9800-.9875

Today’s expected range for the Canadian Dollar against the Euro is 1.2650-1.2750

Today’s expected range for the Canadian Dollar against Sterling is 1.5840-1.5940

The US Dollar is marginally lower this morning as holiday’s in the Far East have closed equity markets throughout the region and have left currency trading subdued. The Euro is a little bit higher from Friday’s close as it reacted to the Spanish Bank stress tests showing that the Spanish Banks will not need any more funds than the previously allotted 60 Billion Euro, the markets are still waiting to see if the Spanish Government will request the full bail-out from the EU later this month as a large swath of Spanish debt is due for redemption and they won’t have the money to pay back the bonds, the ECB announces on interest rates later this week so currency traders will be watching to see if Governor Draghi address the Spanish situation. The Euro probably would have traded higher throughout the morning session but EU manufacturing data showed a decline and on top of poor Chinese manufacturing data put a lid on its strength.

USD.CAD is basically where we left it on Friday, the Loonie initially made some small gains but nothing material and traded in a narrow range for most of the evening. This will be a busy week for the Loonie as we get US and Canadian employment reports this week, minutes from the last Federal reserve meeting and lots of manufacturing data, these types of releases will be closely scrutinized as we head closer to the US general election.

For today the North American markets are showing a strong opening so I would expect USD.CAD to move back lower towards the .9800 level but once again we should have muted ranges.

Have a great day

Mike

GFX Morning Currency Rates
Monday October 01, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9828			0.9803
CAD/USD		1.017			1.02
EUR/USD		1.2893			1.2933
EUR/CAD		1.2672			1.268
STG/CAD		1.5865			1.5883
AUD/CAD		1.0165			1.0204
CAD/JPY		79.28			79.16
CAD/CHF		0.9553			0.9533
CAD/HKD		7.8664			7.8859
CAD/CNY		6.3927			6.4075
CAD/MXN		13.081			13.1034
Commodities
Gold		$1,771			$1,782
OIL		$91.93			$91.99
Option Volatility
Canada
O/N		11.03%			7.58%
1 Week		7.90%			7.70%
1 Month		7.25%			6.90%