GFX Morning FX Commentary July 8th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0525-1.0600

Today’s expected range for the Canadian Dollar against the Euro is 1.3550-1.3625

Today’s expected range for the Canadian Dollar against Sterling is 1.5720-1.5800

The US Dollar is marginally weaker this morning as the market reacts to the strong US employment report from Friday and more poor economic reports out of Germany. Equities in Europe surged on a poorer than expected Industrial Production and Investor Confidence reports, given what Carney and Draghi said last week, there is little or no chance of higher interest rates in the UK or Europe, so funny enough any negative news out of Europe will be positive for equities as it will be perceived that the Central Banks will be pushing more stimulus into the economy, kind of perverse logic but I guess it works.

Up this week (Wednesday)North American investors will get the release of the minutes from the Federal Reserve’s last policy meeting and they will be looking to see if there are any indications of  a move towards tapering the stimulus package, given the strong jobs report from Friday and other strong economic data it looks like they will start soon whether or note they talked about it in their last meeting remains to be seen.

The Canadian Dollar is a little stronger this morning as it is supported by the 1.0550 level at the moment. With the lack of economic information coming out of Canada this week trading will be once again influenced by external events including Fed Chairman’s Ben Bernanke’s speech on economic policy on Wednesday afternoon, if he mentions tapering in that speech then the currency markets should go crazy.

 

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.056			1.0543
CAD/USD		0.947			0.9484
EUR/USD		1.2852			1.2879
EUR/CAD		1.3576			1.3585
STG/CAD		1.5745			1.5793
AUD/CAD		0.9601			0.9663
CAD/JPY		95.73			94.77
CAD/CHF		0.9126			0.9091
CAD/HKD		7.5269			7.3321
CAD/CNY		5.8057			5.851
CAD/MXN		12.3545			12.3357
Commodities
Gold		$1,230.00			$1,232.00
OIL		$102.98			$101.45
US DOLLAR INDEX
P.CLOSE		84.2			84.7
OPEN		84.65			84.25
US 10YR YIELD		2.72%

 

 

GFX Morning Commentary July 5th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0480-1.0580

Today’ expected range for the Canadian Dollar against the Euro is 1.3550-1.3650

Today’s expected range for the Canadian Dollar against Sterling is 1.5760-1.5860

The US Dollar is higher this morning as both Euro and Sterling are under pressure this morning. Both the Bank of England and the European Central Bank yesterday indicated that interest rates will stay low for quite some time and in fact ECB Governor Draghi hinted that Euro interest rates could go lower. The Euro was also hit this morning on poor Factory Orders out of Germany, they declined for the 2^nd straight month. Once again as soon as the Euro-Zone quiets down something hits the market and off the Euro goes again, we still look for the Euro to trade weaker.

Trading today will be dominated by the US Employment report, markets will be paying close attention to the number and analyzing what it means for the Federal Reserve plan to taper their stimulus program. We are expecting 165K new jobs to have been created with the jobless rate dropping by 0.1% to 7.5%, funny enough I think if this number disappoints it should push equities higher as it will be less likely for a quick slowdown on the Fed’s stimulus program.

The Canadian Dollar is weaker this morning but continues to trade within recent ranges, topped at 1.0550 and supported at 1.0475. I think today we will get a break either side of this range and it will depend more on the US Jobs report than the Canadian report. In Canada we are expecting a drop in employment of 7,500 jobs (after creating 95K jobs last month) with no accompanying change in the unemployment rate of 7.1%. A strong report for Canada should give the Loonie a bit of a boost but it will be overshadowed by the US report.

Just a note oil is trading above $101 a barrel and having no effect on the Loonie, there does not seem to be any correlation at the moment.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0543			1.053
CAD/USD					0.9497
EUR/USD		1.2879			1.3004
EUR/CAD		1.3585			1.3698
STG/CAD		1.5793			1.5994
AUD/CAD		0.9663			0.9615
CAD/JPY		94.77			94.66
CAD/CHF		0.9091			0.9008
CAD/HKD		7.3321			7.3424
CAD/CNY		5.851			5.821
CAD/MXN		12.9171			12.2501
Commodities
Gold		$1,237.20			$1,250
OIL		$101.45			$101
US DOLLAR INDEX
P.CLOSE					83.65
OPEN		84.25			83.56

 

 

 

 

GFX Afternoon Update July 4 2013

After the UK kept their interest rate unchanged the EU did the same leaving their interest at 0.5%. The Euro followed the same pattern as the Pound and fell against the US Dollar spooking investors. ECB Governor Draghi spoke about the plan for the Eurozone, to keep the interest rates at the current levels with little chance of a rate hike in the near future. Draghi made it very clear that the Euro-Zone will have low interest rates for some time.

With US banks closed today we should expect to see very thin trading ranges as the day goes on. We did see a rally in the Canadian Dollar this morning, after trading higher for most of the early morning USD.CAD fell back to trade back near 1.0500 which was a bit surprising as the US Dollar was very strong against both Euro and Sterling.

 Tonight will be the release of the German factory orders which could cause some volatility in the Euro. The more interesting report will be tomorrow when key employment data is released from the US and Canada. These reports are highly anticipated and should cause some volatility in the market when they are released.

Have a great evening

Yonah

GFX Morning FX Commentary July 4th, 2013

Good Morning and a very Happy 4^th of July to all our American readers,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0490-1.0570

Today’s expected range for the Canadian Dollar against the Euro is 1.3670-1.3750

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

The US Dollar is marginally stronger with the exception being against Sterling where it just had a huge rally. This morning the Bank of England announced that they would keep interest rates at 0.5% and did not make any changes to the Stimulus program. More importantly they made the statement that the economy did not warrant any rate increases in the near future, GBP.USD immediately fell over 100 points in about 20 seconds on the announcement as it spooked investors. Later this morning we also get the European Central Bank announcing on interest rates later this morning and with the USA closed we may see some wild swings just like we did with Sterling.

The Canadian Dollar gave back the gains it made yesterday and it continues to trade back and forth in recent ranges. Just to highlight my point from yesterday about the Loonie not being overly dependent on the price of oil, oil jumped to $101 a barrel and the Loonie was weaker throughout the night. As I said yesterday there are too many factors at play for the Loonie to be solely dependent on the price of oil.

With the US being closed today we normally would have a very narrow trading range but if the ECB surprises this morning and if Toronto Equities are busy then we may see some enhanced volatility this morning. The afternoon will be quiet as currency traders get ready for the US and Canadian employment reports tomorrow.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.053			1.0537
CAD/USD		0.9497			0.949
EUR/USD		1.3004			1.2962
EUR/CAD		1.3698			1.366
STG/CAD		1.5994			1.6076
AUD/CAD		0.9615			0.9574
CAD/JPY		94.66			94.53
CAD/CHF		0.9008			0.9005
CAD/HKD		7.3424			7.334
CAD/CNY		5.821			5.8189
CAD/MXN		12.2501
Commodities
Gold		$1,250			$1,248
OIL		$101			$100.90
US DOLLAR INDEX
P.CLOSE		83.65
OPEN		83.56			83.65

 

 

 

GFX Morning Commentary July 3rd, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0490-1.0570

Today’s expected range for the Canadian Dollar against the Euro is 1.3640-1.3720

Today’s expected range for the Canadian Dollar against Sterling is 1.6060-1.6140

The US Dollar is mixed this morning as it is stronger against the Euro and weaker against Sterling. In Europe the Euro is lower as the Finance and Foreign Minister of Portugal have both resigned in the last week over budget issues. It is clear that Portugal will not be able to hit their austerity targets and now the Portuguese Government must come up with some answers or resign, borrowing costs in Portugal have risen dramatically and have had a follow on effect in Italy and other countries.

In the UK, the Services industry  report unexpectedly showed a much improving economy, the report showed it accelerated to its fastest pace in over two years. GBP.USD jumped to trade from 1.5120 to 1.5260 and GBP.CAD jumped to trade at 1.6080. Boy is that Mark Carney doing a great job so far!!!

The Canadian Dollar traded in a narrow range but did get a bit stronger during the night, USD.CAD did drop off from its highs yesterday during the late afternoon and that continued during the night . Canada may have benefitted somewhat from the jump in the price of oil to over $100 a barrel, this move is on the back of another flare-up in Mid-East politic this time being the possible outbreak of civil war in Egypt, if the price stays this high then it should be a contributing factor in the Canadian dollar recovering a bit of strength. I caution US Dollar buyers not to expect the Loonie to stage a dramatic recovery if oil continues jumps higher, there are too many other factors at play for the Loonie to solely react to any change in oil prices.

Up today we do get some Secondary US data and Canadian Merchandise Trade data so we  may get some volatility this morning, after that the currency markets should quiet down as the US shuts down early for the 4^th of July holiday. A quick reminder that the US payment system will be closed tomorrow so if you need any wires sent out make sure you get your trades in today. Tomorrow will not be a total loss as we do get the release of the ECB and Bank of England policy announcements, with the US markets closed we could have some crazy moves when these announcements are made.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0537			1.0522
CAD/USD		0.949			0.9444
EUR/USD		1.2962			1.3027
EUR/CAD		1.366			1.3709
STG/CAD		1.6076			1.5991
AUD/CAD		0.9574			0.9664
CAD/JPY		94.53			94.72
CAD/CHF		0.9005			0.9001
CAD/HKD		7.334			7.3671
CAD/CNY		5.8189			5.8255
CAD/MXN					12.28
Commodities
Gold		$1,248			$1,258.00
OIL		$100.90			$98.09
US DOLLAR INDEX
P.CLOSE					83.43
OPEN		83.65			83.19

 

 

 

GFX Morning FX Commentary July 2nd

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0480-1.0560

Today’s expected range for the Canadian Dollar against the Euro is 1.3700-1.3775

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

The US dollar is marginally weaker from our close on Friday, it looks for the most part that  the US Dollar traded in familiar ranges against most currencies, Sterling is a little higher as it strengthened against the Euro for the first time in 5 days on the back of a UK construction report that showed construction spending expanded in June. Monday was the first day on the job for Bank of England Governor Mark Carney and already the currency is a bit stronger, he does chair his first interest rate policy meeting this week so I am sure his week will get a bit tougher as it goes along.

After a very tough run gold seems to be settling down as it climbs for a third straight day, it has not been this low since 2010. It will be interesting to see if it can stage a recovery or will this now be a new reality for the medium term.

The Canadian Dollar continues to trade within recent ranges as it trades back and forth around the 1.0500 level, for the moment it seems to be supported around the 1.0450 level and finds resistance up at the 1.0550 level, I imagine that it will stay within these ranges ahead of Friday’s employment report.

Up today we do get lots of manufacturing data out of the US, we are expecting a 2.0% rise in US Factory orders, the market will be watching for a positive report, a poor number should create employment concerns for the market and hurt stocks .

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0522			1.0482
CAD/USD		0.9844			0.954
EUR/USD		1.3027			1.3061
EUR/CAD		1.3709			1.3691
STG/CAD		1.5991			1.5974
AUD/CAD		0.9664			0.9686
CAD/JPY		94.72			0.9493
CAD/CHF		0.9001			0.9011
CAD/HKD		7.3671			7.3795
CAD/CNY		5.8255			5.852
CAD/MXN		12.28			12.4584
Commodities
Gold		$1,258.00			$1,203
OIL		$98.09			$97.25
US DOLLAR INDEX
P.CLOSE		83.43			83.17
OPEN		83.19			83.26