GFX Morning FX Commentary December 7th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9880-.9960

Today’s expected range for the Canadian Dollar against the Euro is 1.2800-1.2870

Today’s expected range for the Canadian Dollar against Sterling is 1.5870-1.5950

The US Dollar is stronger this morning as the increasingly bad economic data continues to pour out of Europe. Yesterday it was ECB Governor Draghi saying more stimulus may be necessary and hinting at an interest rate cut to support the EU economy, this morning poor production data out of Germany and the German Bundesbank (German Central Bank) downgraded German their economic forecast for German growth as the Euro area recession is slowing the region’s biggest economy. The only factor that gives the Euro any strength is when some bad news comes out of the USA ( such as the Fiscal cliff) and then the Euro jumps a bit, but we have continually seen over the past few months that the Euro cannot hold onto any strength for any length of time.

The Canadian Dollar is marginally weaker, the break of .9900 that I was looking for over the past couple of days never materialized and now with the stronger US Dollar the Loonie is under a bit of pressure again, we still trade in the .9900-.9950 range that we have been in for the last couple of weeks but now USD.CAD looks like it wants to test higher, we will see if it can make a move today.

Today’s trading will be dominated but the US and Canadian jobs reports, in Canada we are expecting 14K jobs to have been created last month with no change to the jobless rate, in the US we are expecting 90K jobs to have been created, the US number will be reduced because of the number of lost jobs due to Hurricane Sandy. If we get a poor Canadian number look for USD.CAD to jump higher, a strong showing in Canada will push us back towards the lower end of the range.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9927			0.9912
CAD/USD		1.0063			1.0088
EUR/USD		1.2928			1.3065
EUR/CAD		1.2835			1.2953
STG/CAD		1.5908			1.5967
AUD/CAD		1.039			1.0396
CAD/JPY		82.93			83.09
CAD/CHF		0.9414			0.9347
CAD/HKD		7.7862			7.7965
CAD/CNY		6.2675			6.28
CAD/MXN		12.9776			13.0359
Commodities
Gold		$1,697			$1,694
OIL		$86.10			$87.90
Option Volatility
Canada
O/N		5.94%			6.00%
1 Week		5.59%			5.00%
1 Month		5.22%			4.80%

 

 

 

GFX Morning FX Commentary December 6th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9880-.9940

Today's expected range for the Canadian Dollar against the Euro is 1.2940-1.3010

Today's expected range for the Canadian Dollar against Sterling is 1.5850-1.6025

The US Dollar is unchanged this morning as currency markets awaited interest rate decisions from the Bank of England and the European Central Bank. This morning both institutions held their interest rates at present levels and the Bank of England announced a pause in their quantative easing program, so they will actually stop buying bonds for the time being. These announcements were as expected and markets will await ECB Governor Draghi’s press conference later this morning.

Last night the Reserve Bank of New Zealand kept interest rates steady, the NZ Dollar (kiwi as it is referred to) was able to get a small boost. It certainly looks the world over that there is no appetite for higher interest rates.

There was some positive signs coming out of Washington as it looks like some Republicans were starting to come around to the President’s plan to raise taxes on the wealthiest Americans. These fiscal cliff discussions will go right down to the wire so look for the rhetoric to heat up in the coming weeks.

The Canadian Dollar is unchanged from yesterday's Toronto close as currency traders awaited the results from  the interest rate announcements and the US and Canadian employment reports due out tomorrow. Once again we had a very narrow overnight range for the Loonie and we continue to trade within recent ranges. For the short-term I still favour a move lower to break below the .9900 level but I do not think it will be a big move if it happens today.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9912			0.992
CAD/USD		1.0088			1.008
EUR/USD		1.3065			1.0386
EUR/CAD		1.2953			1.2989
STG/CAD		1.5967			1.5984
AUD/CAD		1.0396			1.0386
CAD/JPY		83.09			82.81
CAD/CHF		0.9347			0.9354
CAD/HKD		7.7965			7.7906
CAD/CNY		6.28			6.2725
CAD/MXN		13.0359			13.0523
Commodities
Gold		$1,694			$1,703
OIL		$87.90			$88.58
Option Volatility
Canada
O/N		6.00%			6.20%
1 Week		5.00%			5.00%
1 Month		4.80%			4.80%

 

 

GFX Morning FX Commentary December 5th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9875-.9950

Today’s expected range for the Canadian Dollar against the Euro is 1.2940-1.3020

Today’s expected range for the Canadian Dollar against Sterling is 1.5950-1.6020

The US Dollar is marginally weaker this morning as the Euro pushed higher in early overnight trading, in China the new government signaled that they would support further urbanization of the country and strengthen real estate controls to avoid a real estate bubble. The early strength in the Euro was cut short as the Euro-Zone October Retail Sales report came out showing a bigger decrease than expected, this was closely followed by a poor UK service industry growth report, European currencies in general were sold off in quick fashion after these reports.

The Canadian Dollar is marginally stronger this morning as it continues to trade in narrow overnight ranges, the Bank of Canada announcement yesterday came in pretty much as expected so did not have a lasting effect on the currency in overnight markets. Up today we do get some US manufacturing data but it most likely will be skewed by the effects of hurricane Sandy so I am not sure how closely watched the information will be.

For now it looks like USD.CAD wants to test the lower end of our .9900-.9950 trading range, a strong manufacturing number from the US may give equities the push that will drive USD.CAD below the .9900 level, if it does go below I would not expect a big dip and US Dollar buyers need to be ready with their orders to make sure they take advantage of the move.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.992			0.994
CAD/USD		1.008			1.006
EUR/USD		1.0386			1.308
EUR/CAD		1.2989			1.3003
STG/CAD		1.5984			1.6029
AUD/CAD		1.0386			1.041
CAD/JPY		82.81			82.45
CAD/CHF		0.9354			0.9325
CAD/HKD		7.7906			7.7756
CAD/CNY		6.2725			6.26
CAD/MXN		13.0523
Commodities
Gold		$1,703			$1,709
OIL		$88.58			$86.86
Option Volatility
Canada
O/N		6.20%			6.50%
1 Week		5.00%			5.00%
1 Month		4.80%			4.80%

GFX Morning Commentary December 4th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9900-.9960

Today’s expected range for the Canadian Dollar against the Euro is 1.2980-1.3050

Today’s expected range for the Canadian Dollar against Sterling is 1.5970-1.6050

The US Dollar is marginally weaker this morning as the Euro has jumped on positive news out of Europe. In Greece the government as part of their agreement with the EU rescue fund and started a bond buying program which they agreed to back in March, private investors have until Friday to sign up to sell their Greek Government bonds back to the Greek Government at 32% to 40% of their face value. Most investors feel that this is the best they could hope for so they will jump at this opportunity, this will reduce the overall Greek debt and private investors will be losing over 100 million Euro on their investments. In Spain the government also announced that the Spanish bank bailout has gone through, this is not a full bailout of Spain, that is yet to come, this round is just to prevent a collapse of their banking system. I am not sure this Euro centric optimism can be maintained but for the moment the Euro seems to be on a bit of a roll.

Last night saw the Reserve Bank of Australia lower its lending rates by 0.25% to a record low 3.0%, the Aussie Dollar actually jumped on the news which is a bit surprising as local currencies usually drop when a central bank lowers it interest rate.

The Canadian Dollar had another quiet night on the Asian and European trading markets, nothing new to report as it is still firmly stuck between .9900 and .9950, we may see some breakout today as the Bank of Canada is about to release its last interest rate policy announcement for the year. We are not expecting any change to the interest rate but given the apparent slowdown in the Canadian economy we may see a change in tone from the Bank. Previously they would have been looking for an opportunity to raise interest rates to stem the increase in household debt but with the slowdown in growth in Canada they may want to start hinting at cutting rates next year, my guess is that they will indicate that the  outlook for the economy is turning negative but they will not hint at change to policy.  If I am right the USD.CAD should break a little higher throughout the day. I will send out an alert shortly after the announcement at 9:00 am.

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.994			0.9925
CAD/USD		1.006			1.0075
EUR/USD		1.308			1.3028
EUR/CAD		1.3003			1.2933
STG/CAD		1.6029			1.5933
AUD/CAD		1.041			1.0348
CAD/JPY		82.45			82.76
CAD/CHF		0.9325			0.9321
CAD/HKD		7.7756			7.7834
CAD/CNY		6.26			6.2726
CAD/MXN					13.0227
Commodities
Gold		$1,709			$1,717
OIL		$86.86			$88.98
Option Volatility
Canada
O/N		6.50%			6.90%
1 Week		5.00%			5.20%
1 Month		4.80%			5.10%

 

 

 

GFX Morning FX Commentary December 3rd, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9880-.9950

Today’s expected range for the Canadian Dollar against the Euro is 1.3010-1.3075

Today’s expected range for the Canadian Dollar against the Sterling is 1.5900-15970

The US Dollar is marginally weaker this morning as better than expected Chinese manufacturing data and the unresolved budget negotiations in the US helped push equities higher and the US Dollar lower. In very quiet trading conditions EURO.USD rose to trade at 1.3040 but still trades in recent ranges as it looks for a breakout.

This week could be a very busy week as the new month brings lots of economic reports with it, we kick off with some manufacturing data out of the US today, followed later in the week by several Central Bank policy announcements (including the Bank of Canada tomorrow) and then we close out the week with the Canadian and US employment reports on Friday, hopefully these reports will get the market moving.

Nothing new to report on the Canadian Dollar front, one of our trading partners told us last week’s USD.CAD trading range was the smallest weekly trading range for the Loonie since 1991, hopefully the economic activity this week will get the Loonie moving in one direction or the other.

Up today we get the ISM manufacturing data and Construction Spending out of the US. I would expect that we will see more positive data out of the US, if the numbers are very strong then you will see equities jump higher and USD.CAD will move lower towards .9900.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9925			0.9925
CAD/USD		1.0075			1.0075
EUR/USD		1.3028			1.3011
EUR/CAD		1.2933			1.2915
STG/CAD		1.5933			1.2929
AUD/CAD		1.0348			1.0349
CAD/JPY		82.76			83.26
CAD/CHF		0.9321			0.9324
CAD/HKD		7.7834			7.7874
CAD/CNY		6.2726			6.2705
CAD/MXN		13.0227			13.0132
Commodities
Gold		$1,717			$1,732
OIL		$88.98			$88.21
Option Volatility
Canada
O/N		6.90%			5.00%
1 Week		5.20%			5.20%
1 Month		5.10%			5.10%