GFX Morning FX Commentary Sept 9th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0340-1.0420

Today’s expected range for the Canadian Dollar against the Euro is 1.3670-1.3850

Today’s expected range for the Canadian Dollar against Sterling is 1.6260-1.6340

The US Dollar is marginally weaker this morning as the financial markets get ready for the vote in Congress on military intervention in Syria. Overnight the Yen was the biggest mover as USD.JPY traded above 100 for a little while as the announcement that Tokyo has been awarded the 2020 Olympic Games is viewed as providing a boost for the economy over the next number of years. The Aussie and Kiwi Dollars are also stronger after China reported a better than expected export number, AUD.USD hit a 3-week high so it has staged quite a recovery over the last little while.

The question of when the US Federal Reserve will remove some stimulus keeps weighing on the currency markets, with the poor jobs report out of the US on Friday I think any change in September is very unlikely and another poor report will almost certainly push the tapering into 2014.

The Canadian Dollar is marginally stronger after Friday’s big gain, it will now settle into its new trading range near the 1.0400 level against the Greenback. It has done really well against the Euro and Sterling, just over a week ago EURO.CAD was at 1.4100 and GBP.CAD was at 1.6400, EURO.CAD is especially lower at is now trades near 1.3700. If you are a buyer of Euro you may want to take  advantage of these rates on a forward contract, with German elections on the horizon we could easily see a spike in the Euro if Merkel wins the elections.

Nothing of importance out on the economic front today so I think USD.CAD will stay in a confined range, given how fast USD.CAD has dropped I would expect that we will see a bit of a pullback higher above 1.0400 before we see any further Canadian Dollar strength. If we see the US Congress pass an attack on Syria today the effect  should be US Dollar positive and USD.CAD could jump back towards 1.0450.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0385			1.0454
CAD/USD		0.963			0.9565
EUR/USD		1.3192			1.3106
EUR/CAD		1.3702			1.5571
STG/CAD		1.6277			1.6282
AUD/CAD		0.9554			0.957
CAD/JPY		95.8			0.954
CAD/CHF		0.9017			0.9038
CAD/HKD		7.4614			7.4134
CAD/CNY		5.8912			5.85
CAD/MXN		12.71			12.8009
Commodities
Gold		$1,386.00			$1,364.00
OIL		$109.95			$108.53
US DOLLAR INDEX
P.CLOSE		82.18			82.67
OPEN		82.12			82.64
US 10YR YIELD		2.94%			2.97%

 

 

GFX Mornign FX Commentary September 6th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0420-1.0520

Today’s expected range for the Canadian Dollar against the Euro is 1.3680-1.3780

Today’s expected range for the Canadian Dollar against Sterling is 1.6260-1.6360

The US Dollar is marginally stronger this morning in quiet overnight markets with the Canadian Dollar for once being one of the most active currencies. In the UK the Pound was trading lower this morning (GBP.USD fell to trade at 1.5565) as a UK manufacturing report came in a little weaker than expected ending the long string of positive economic data out of the UK. The Euro is a little weaker as currency traders close out their long Euro positions ahead of the US Employment report this morning.

The Canadian Dollar is (surprisingly to me) quite a bit stronger as I thought it would continue to trade around the 1.0500 level ahead of this morning’s Canadian employment report. In talking to some currency traders this morning I get a sense that speculators who were long US Dollar and short Canadian Dollars anticipation a move higher for USD.CAD started to bail-out ahead of this morning’s employment report, I think this started a bit of a cascade as a lot of stop-loss orders were triggered on the move down towards 1.0450. I think the market will now stay at these levels until the release of the Employment report at 08:30.

For the US number we are expecting an increase in US payrolls of 180,000 and no change to the unemployment rate. In Canada we are expecting 20+K new jobs to have been created, after last month’s loss of 18K jobs this will be a quick turnaround for Canada which I think may have been offset by flood relief jobs in Calgary. If we see a strong Canadian number (upwards of 25K+) I think we will see a pullback of USD.CAD towards 1.0425, if we see a poor number USD.CAD will be back above 1.0500 quite easily. Either way I am expecting it to be quite volatile after the releases so make sure you have your orders in early.

Have a great weekend.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0454			1.0481
CAD/USD		0.9565			0.9541
EUR/USD		1.3106			1.3213
EUR/CAD		1.5571			1.3852
STG/CAD		1.6282			1.6377
AUD/CAD		0.957			0.9588
CAD/JPY		0.954			95.27
CAD/CHF		0.9038			0.8939
CAD/HKD		7.4134			7.3932
CAD/CNY		5.85			5.835
CAD/MXN		12.8009			12.7724
Commodities
Gold		$1,364.00			$1,395.00
OIL		$108.53			$107.75
US DOLLAR INDEX
P.CLOSE		82.67			82.2
OPEN		82.64			82.2
US 10YR YIELD		2.97%			2.89%

 

 

 

GFX Morning Commentary September 5th, 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0460-1.0540

Today’s expected range for the Canadian Dollar against the Euro is 1.3830-1.3900

Today’s expected range for the Canadian Dollar against Sterling is 1.6380-1.6460

The US Dollar is mixed this morning in narrow trading ranges. In the UK the Bank of England kept its key interest rate at 0.5% and kept its bond purchasing program at 375 Billion Pounds. There were no surprises here as BOE Governor Carney linked a rise in interest rates to a reduction in unemployment and inflation remaining in check, the Pound traded slight higher with GBP.USD trading to 1.5660 and GBP.CAD trading to 1.6435. The minutes from this meeting will be released in two weeks.

The other big mover overnight was the Japanese Yen which briefly weakened above the 100.00 mark against the US Dollar. The Bank of Japan kept interest rates unchanged and indicated that they felt the economy was improving faster than they had hoped. The Bank of Japan has been hoping for a very weak Yen to help the export market so these kinds of reports seem to improve that situation.

As I write the European Central Bank announced this morning that they are keeping their interest rates at 0.5% so no surprises there. ECB Governor Draghi give his press conference at 08:30 so that may get the attention of the currency markets if he moves the direction of the bank in any way.

The Canadian Dollar is unchanged this morning against the US Dollar, I think yesterday’s Bank of Canada report left most investors and currency traders with a very empty feeling, the statement was very bland without any real guidance,  I certainly hope this will not be an ongoing characteristic of the new Poloz regime. With USD.CAD right were we left it yesterday the focus will now shift to the Canadian and US employment reports due out tomorrow, investors will be looking to see if the US can maintain the pace of employment that the economy has been experiencing.

Up today we do get the ADP employment report (a report of private employers) for the month of August along with some secondary US data.  If we get some surprises we could see some volatility this morning but for the most part I still favour a slow grind higher for USD.CAD ahead of tomorrow’s employment numbers.

Have a great day.

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0481			1.049
CAD/USD		0.9541			0.9533
EUR/USD		1.3213			1.3183
EUR/CAD		1.3852			1.3829
STG/CAD		1.6377			1.6382
AUD/CAD		0.9588			0.962
CAD/JPY		95.27			0.9484
CAD/CHF		0.8939			0.8922
CAD/HKD		7.3932			7.388
CAD/CNY		5.835			5.8292
CAD/MXN		12.7724			12.7265
Commodities
Gold		$1,395.00			$1,403.00
OIL		$107.75			$107.79
US DOLLAR INDEX
P.CLOSE		82.2			82.38
OPEN		82.2			82.29
US 10YR YIELD		2.89%			2.85%

 

 

 

 

GFX Morning FX Commentary September 4th, 2013

Good Morning,

Today’s expected range for the Canadian  Dollar against the US Dollar is 1.0460-1.0560

Today’s expected range for the Canadian Dollar against the Euro is 1.3820-1.3900

Today’s expected range for the Canadian Dollar against Sterling is 1.6360-1.6440

The US Dollar is marginally weaker to start the day as positive economic news from around the globe seems to be growing investor confidence that the global recovery is back on pace. In China the economy reported that their services industry expanded, in Australia the GDP grew at a faster pace than was expected and in England the pound rose to a three-month high against the Euro as UK services expanded at the fastest pace since 2006. A very good night for the economists of the world which pulled the US Dollar back a little bit but surprisingly the equity markets did not like what they saw as most were in negative territory overnight, it could be the Syria situation weighing on investor confidence at the moment.

The biggest currency mover overnight were the Australian and New Zealand Dollars as they rallied almost 2% on the back of the strong GDP report, they are starting to recover the tremendous beating that they took at the beginning of last month. The emerging market currencies continue to remain under pressure in the Far East especially as the Indian Rupee and Indonesian Rupiah continue to struggle.

With the strength in the Aussie and Kiwi Dollars overnight the Canadian Dollar was able to pull back a little strength last night against the US Dollar (and continues to slowly strengthen against the Euro) as it traded back below 1.0500 but still basically is trading in very tight ranges. Trading today will be dominated by the 10:00 Bank of Canada interest rate announcement, we are not expecting any changes to interest rate policy, Canadian financial markets will be looking at the statement to see any hints of when interest rate hikes will be occurring or for any comments on the possible tapering of financial stimulus by the US Federal Reserve. Given that the Canadian economic reports have been quite poor lately I would not be overly surprised if they bank stays away from any talk of interest rates hikes, such a “dovish” statement I think would move USD.CAD back higher but not by a whole lot.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.049			1.0531
CAD/USD		0.9533			0.9496
EUR/USD		1.3183			1.3175
EUR/CAD		1.3829			1.3872
STG/CAD		1.6382			1.6405
AUD/CAD		0.962			0.9512
CAD/JPY		0.9484			94.42
CAD/CHF		0.8922			0.888
CAD/HKD		7.388			7.3571
CAD/CNY		5.8292			5.8096
CAD/MXN		12.7265			12.755
Commodities
Gold		$1,403.00			$1,393.00
OIL		$107.79			$107.24
US DOLLAR INDEX
P.CLOSE		82.38			82.3
OPEN		82.29			82.41
US 10YR YIELD		2.85%			2.75%

 

 

 

 

GFX Morning FX Commentary Sept 03, 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 1.3850-1.3930

Today's expected range for the Canadian Dollar against Sterling is 1.6360-1.6440

The US Dollar is mixed to start the new trading month as currency markets gear back up after the North American Labour Day holiday. Overnight the US Dollar had a brief surge as a Russian news agency reported that two ballistic missiles were fired from the Mediterranean headed for the Eastern Mediterranean, later in the morning Israel announced that they test fired two missiles in conjunction with the US. This just highlights how nervous investors are about the Geo-political situation in the Middle East at the moment.

Sterling continues to move higher, yesterday the UK economy reported better than expected construction data so the recent upturn in the UK economy continues.

Overnight the Reserve Bank of Australia kept its interest rate at current levels but took out it negative tone from its last statement, the Aussie Dollar which had been trading very weak jumped over 1.5% on the report which is the best gain it has had in months. Later this week we get the European Central Bank and Bank of England reporting on interest rates.

The Canadian Dollar continues to remain weak, yesterday it traded in a very narrow range near the 1.0550 level and most likely will remain in a narrow range for the rest of the day. It should be an active week for the Loonie as we have the Bank of Canada interest rate announcement tomorrow and on Friday we have the Canadian Jobs report due out. It looks like September could be a very volatile month in the currency markets with the situation in Syria, lots of interest rate news, very volatile equity markets and the German Election set for September 22^nd all influencing financial markets. Given that markets do not like uncertainty I would expect that the US Dollar could benefit from all that is happening but we shall see as the month unfolds.

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0531			1.053
CAD/USD		0.9496			0.9497
EUR/USD		1.3175			1.3237
EUR/CAD		1.3872			1.3941
STG/CAD		1.6405			1.631
AUD/CAD		0.9512			0.94
CAD/JPY		94.42			93.23
CAD/CHF		0.888			0.8831
CAD/HKD		7.3571			7.3598
CAD/CNY		5.8096			5.8122
CAD/MXN		12.755
Commodities
Gold		$1,393.00			$1,395.00
OIL		$107.24			$107.77
US DOLLAR INDEX
P.CLOSE		82.3			82.01
OPEN		82.41			82.03
US 10YR YIELD		2.75%			2.75%