GFX Morning FX Commentary Oct 15th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9750-.9850

Today’s expected range for the Canadian Dollar against the Euro is 1.2660-1.2750

Today’s expected range for the Canadian Dollar against Sterling is 1.5675-1.5775

The US Dollar is marginally weaker this morning  in very quiet trading conditions. There was lots going on last night and this morning (IMF calling for a quicker creation of common EU banking regulations, China reported better than expected trade numbers and falling inflation, UK inflation was a little lower prompting the call for more Asset purchase by the central bank and lots of comments about Greece leaving or never leaving the EU) but none of these managed to capture the interest of the currency markets interest. There is an EU summit at the end of this week which the currency markets may wait for so we could be in for an overall quiet week on the volatility front.

Nothing new to report on the Canadian Dollar, we start our third week with USD.CAD trading around the .9800 level with little on the horizon  to get the Loonie exicited, up today we get the release of the September Retail Sales and the Empire State (New York) Manufacturing Index today which will most likely continue to confirm that a modest recovery is underway in the US. Disappointing numbers will spook the equity markets and you may see USD.CAD jump above the .9800 level, other than that USD.CAD trading should  remain subdued.

 

Have a great week
Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9777			0.9777
CAD/USD		1.0228			1.0228
EUR/USD		1.2962			1.2963
EUR/CAD		1.2675			1.2675
STG/CAD		1.5699			1.5693
AUD/CAD		1.0006			1.0021
CAD/JPY		80.46			80.21
CAD/CHF		0.9534			0.9535
CAD/HKD		7.9048			7.9076
CAD/CNY		6.4105			6.4068
CAD/MXN		13.0998			13.1761
Commodities
Gold		$1,748			$1,770
OIL		$91.57			$92.17
Option Volatility
Canada
O/N		9.35%			6.72%
1 Week		6.41%			6.86%
1 Month		6.61%			6.72%

GFX Morning FX Commentary Oct 12th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9750-.9850

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 1.5670-1.5870

The US Dollar is marginally weaker this morning as better than expected Euro-Zone Industrial Production numbers and further speculation of Spain asking for a bailout have pushed the Euro a little higher overnight. I am not sure that it had any effect on the value of the Euro this morning but the Nobel Committee announced in Oslo announced that it has awarded the Nobel Peace Prize to the European Union for its work in promoting peace around the world, a bit of a head scratcher but there you go. I wonder who gets to keep the cash that comes with the award, I guess they can divide it up amongst the 17 countries and apply it to their deficits.

Equity markets are pointing higher again this morning as they are reacting positively to yesterday’s announcement of a big drop in unemployment claims in the US, it does look like the US is seeing a limited rebound and employment will continue to grow (albeit slowly) as the housing market continues to recover. This morning further evidence of the recovery in the USA came out when JPMORGAN CHASE came out with better than expected earnings, for a recovery to take hold in the US you will need to see a strong financial sector.

Nothing new on the Canadian Dollar front, USD.CAD continues to hang around the .9800 level in very uninspiring trading patterns. We do get some Consumer sentiment data and inflation data out of the US today so we may see a bit of volatility but for the most part I would expect the currency markets to ignore these numbers and USD.CAD will continue to trade in narrow ranges.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9777			0.9789
CAD/USD		1.0228			1.0215
EUR/USD		1.2963			1.2909
EUR/CAD		1.2675			1.2638
STG/CAD		1.5693			1.5693
AUD/CAD		1.0021			1.0067
CAD/JPY		80.21			79.92
CAD/CHF		0.9535			0.955
CAD/HKD		7.9076			7.8978
CAD/CNY		6.4068			6.405
CAD/MXN		13.1761			13.2044
Commodities
Gold		$1,770			$1,772
OIL		$92.17			$92.03
Option Volatility
Canada
O/N		6.72%			10.13%
1 Week		6.86%			6.74%
1 Month		6.72%			6.70%

 

GFX Morning Commentary Oct 11th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9750-.9850

Today’s expected range for the Canadian Dollar against the Euro is 1.2620-1.2720

Today’s expected range for the Canadian Dollar against Sterling is 1.5670-1.5770

The US Dollar is marginally weaker this morning as events in Europe continue to develop pushing Spain to the brink of requesting a bailout. This morning S&P downgraded Spanish Bonds to one level above junk which will make it much more difficult for Spain to raise funds on the open market, also this morning IMF President Lagarde stated that Greece should be allowed another 2 years to reach their budget targets so that they can focus on growth, this statement puts the IMF and Germany on a collision course as the Germans are deeply opposed to any changes in the terms of the Greek bailout. I get a sense that financial markets are pushing Spain towards the bailout and like this idea which would bring some measure of  stability to the Euro region. Whenever we see the expectation rising for a Spanish bailout equities jump higher and the Euro gets stronger.

Another factor helping the Euro recover last night was a rise in EURO.JPY. There is growing expectation that the Bank of Japan will intervene in the currency markets to sell the Yen (buy USD) to bring its value down. Right now USD.JPY is very weak and the strong yen is hurting the Japanese export market. We are now seeing more and more countries (especially emerging countries) commenting that the US QE 3 program is hurting their exchange rate and affecting exports, central bank intervention may be an increasing theme for 2013.

The Canadian Dollar continues to trade around the .9800 level without any real sense of direction at the moment. The Loonie keeps getting its intra-day direction from the equity markets, when risk is on and equities are higher  USD.CAD will move lower (as it did last night) and when risk is off and equities are lower, USD.CAD will jump higher. Until we see a trend develop this will remain the best indicator for the Loonie.

Up today we do get some trade data out of the US and Canada but for the most part I think the currency markets will ignore these reports, we won’t see any new trends in the Canadian markets develop until the Spanish situation is resolved. With equities pointing higher to start the day look for USD.CAD to move back towards the .9775 level.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9789			0.9782
CAD/USD		1.0215			1.0223
EUR/USD		1.2909			1.2864
EUR/CAD		1.2638			1.2584
STG/CAD		1.5693			1.5652
AUD/CAD		1.0067			1.0009
CAD/JPY		79.92			79.98
CAD/CHF		0.955			0.9613
CAD/HKD		7.8978			7.9192
CAD/CNY		6.405			6.4835
CAD/MXN		13.2044			13.1682
Commodities
Gold		$1,772			$1,764
OIL		$92.03			$91.90
Option Volatility
Canada
O/N		10.13%			10.38%
1 Week		6.74%			7.09%
1 Month		6.70%			6.85%

 

 

 

 

GFX FX Morning Commentary Oct 10th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9740-.9840

Today’s expected range for the Canadian Dollar against the Euro is 1.2560-1.2660

Today’s expected range for the Canadian Dollar against Sterling is 1.5620-1.5720

The US Dollar is marginally stronger this morning as investors are increasingly worried about the EU crisis and  slowing Global growth. This morning the IMF reported that European Banks may have to sell upwards of 4.5 Trillion Euros worth of assets to have enough cash on their books to operate properly, ALCOA the world’s largest aluminum producer said they see a 1% drop in global demand for aluminum and Fitch bond rating agency said the recession in Spain and Italy appears to be intensifying. Once again no end in sight to the bad news, The US Dollar will continue to benefit on the safe haven effect.

The Canadian Dollar is unchanged from yesterday’s Toronto close and traded in a very narrow overnight range,  the Loonie does remain strong against the Euro and Sterling which tells me that money from these regions is flowing into Canada for protection. Given our relatively strong economy when compared to other regions there is no reason to think that the Canadian Dollar will not benefit in the medium-term.

Over the short-term there is no reason that I can see that will allow USD.CAD to break out in either direction, it looks like we will trade back and forth around the .9800 level for a while yet. For today with North American equity markets pointing lower to start the day I would expect USD.CAD to test a bit higher and see if we can get a close above the .9800 level which might get currency traders exicited.

 

Have a great day

Mike

GFX Morning Currency Rates
Wednesday October 10, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9782			0.9768
CAD/USD		1.0223			1.0238
EUR/USD		1.2864			1.2929
EUR/CAD		1.2584			1.2626
STG/CAD		1.5652			1.5639
AUD/CAD		1.0009			0.9972
CAD/JPY		79.98			80.08
CAD/CHF		0.9613			0.9584
CAD/HKD		7.9192			7.9316
CAD/CNY		6.4835			6.4338
CAD/MXN		13.1682			13.1039
Commodities
Gold		$1,764			$1,773
OIL		$91.90			$89.54
Option Volatility
Canada
O/N		10.38%			9.54%
1 Week		7.09%			6.96%
1 Month		6.85%			6.83%

GFX Morning FX Commentary October 9th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9730-.9830

Today’s expected range for the Canadian Dollar against the Euro is 1.2600-1.2675

Today’s expected range for the Canadian Dollar against Sterling is 1.5620-1.5720

As we come back to the office after the holiday weekend we find the US Dollar stronger against the Euro and Sterling and marginally weaker against the Canadian Dollar and other commodity currencies. Yesterday the Euro was weaker as EU finance ministers met to discuss the Spanish situation and German Industrial Production came in weaker than expectation, in the UK Sterling was also weaker as a Lloyds Bank Employment survey painted a bleak picture.

 

This morning it is the IMF (international Monetary Fund) report on global growth that has driven the markets. Basically the IMF has downgraded overall global growth for 2012 and 2013 (this does not come as a complete surprise) and painted a bleak picture for EU growth in particular citing that a big reason for the decline in global growth is the lack of a solution to the current EU crisis. The IMF lowered EU growth to -0.2% for 2012 and 0.5% for 2013, basically there will not be any growth in the EU economy until at least 2014, how do you create jobs when you have no growth? Today German Chancellor Angela Merkel travels to Athens to show her support for Greek austerity measures, in a welcoming gesture the Greeks have put 7,000 police officers on the streets and the Greek people are planning a nice welcoming party, talk about fanning the flames,  I imagine that it will be the same kind of reception that Gary Bettmann would get here in Canada.

The Canadian Dollar has fared very well the last couple of days as it is marginally stronger against the US Dollar and much stronger against the Euro and Sterling. The IMF did reduce the Canadian growth rate for 2012 to 1.9% and for 2013 to 2.0% which has us faring better than most economies. EURO.CAD closed around 1.2760 on Friday and today trades near 1.2630 so a good move for the Loonie. I am thinking that currency traders are starting to like the fact that the Canadian economy is hanging in and will keep the Loonie at current levels against the US Dollar over the short-term.

For today with North American equity markets pointing lower I would expect USD.CAD to pull back a bit, I would think for most of this week we will see USD.CAD trade around the .9800 level.

 

Have a great week

Mike

GFX Morning Currency Rates
Tuesday October 09, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9768			0.9807
CAD/USD		1.0238			1.0192
EUR/USD		1.2929			1.3007
EUR/CAD		1.2626			1.2784
STG/CAD		1.5639			1.5871
AUD/CAD		0.9972			1.005
CAD/JPY		80.08			79.87
CAD/CHF		0.9584			0.9496
CAD/HKD		7.9316			7.8988
CAD/CNY		6.4338			6.4538
CAD/MXN		13.1039			13.0164
Commodities
Gold		$1,773			$1,792
OIL		$89.54			$90.76
Option Volatility
Canada
O/N		9.54%			7.80%
1 Week		6.96%			7.66%
1 Month		6.83%			7.15%