GFX Mornign FX Commentary December 12th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9820-.9890

Today's expected range for the Canadian Dollar against the Euro is 1.2840-1.2920

Today's expected range for the Canadian Dollar against Sterling is 1.5900-1.5970

The US Dollar is marginally weaker this morning as the expectation by investors that the Federal Reserve will this afternoon announce further quantative easing to help boost the US economy. Overall it was a very quiet night (despite North Korea firing a rocket into orbit) as currency traders await the announcement from the Fed this afternoon.

The Japanese Yen reached an 8 month low against the US Dollar as the expectation that the December 16^th elections will result in an opposition victory and a new round of stimulus measures in the world’s third largest economy.

The Canadian dollar is unchanged in overnight trading as it too sits and awaits the Fed announcement. Markets are expecting another $45 Billion per month in Fed purchases of mortgage securities to be announced, such a move should be equity positive and US Dollar negative, we could easily see USD.CAD break below the .9850 level at some point.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9853			0.9872
CAD/USD		1.0147			1.0128
EUR/USD		1.0327			1.2993
EUR/CAD		1.2837			1.2829
STG/CAD		1.5908			1.5889
AUD/CAD		1.0392			1.0359
CAD/JPY		84.05			83.51
CAD/CHF		0.9437			0.9437
CAD/HKD		7.844			7.8285
CAD/CNY		6.3415			6.3288
CAD/MXN		12.9321
Commodities
Gold		$1,715			$1,713
OIL		$86.28			$86.02
Option Volatility
Canada
O/N		7.48%			6.50%
1 Week		5.16%			5.20%
1 Month		5.08%			5.10%

GFX Morning FX Commentary December 11th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9830-.9900

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 marginally weaker as the Euro received a boost from a better than expected German investor confidence report. EURO.USD jumped to trade as high as 1.2990 on this report as it was the first time since May that investor confidence rose, not sure what German investors are seeing that would inspire them so much but we will see if this momentum can be carried forward.

One thing that investors may be looking at is further stimulus from the US Federal Reserve, the Fed begins its last meeting of the year today amid speculation that they may announce further stimulus for the American economy. such an announcement would push equities higher and drive the US Dollar lower.

The Canadian Dollar had a very narrow overnight trading range as it settles in after the strong employment report and the approval of the Nexen deal by Industry Canada on Friday gave it a boost, we may stay in this new range for a while now. We do have some US and Canadian trade data out this morning but for the most part the currency markets will settle down and await the announcement from the Fed tomorrow afternoon. I still favour caution for US Dollar buyers, any negative news will push USD.CAD back higher quickly and further strength for the Loonie will be slower to come by over a longer period of time.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9872			0.9876
CAD/USD		1.0128			1.0124
EUR/USD		1.2993			1.2909
EUR/CAD		1.2829			1.2751
STG/CAD		1.5889			1.5852
AUD/CAD		1.0359			1.0357
CAD/JPY		83.51			83.19
CAD/CHF		0.9437			0.9458
CAD/HKD		7.8285			7.8242
CAD/CNY		6.3288			6.3171
CAD/MXN					12.991
Commodities
Gold		$1,713			$1,714
OIL		$86.02			$86.47
Option Volatility
Canada
O/N		6.50%			6.58%
1 Week		5.20%			5.21%
1 Month		5.10%			5.12%

GFX Morning FX Commentary December 10th 2012

Good Morning

Today’s expected range for the Canadian Dollar is against the US Dollar is .9830-.9900

Today’s expected range for the Canadian Dollar against the Euro is 1.2740-1.2820

Today’s expected range for the Canadian Dollar against Sterling is 1.5840-1.5930

The US Dollar is marginally stronger this morning as news out of Italy that Prime Minister Monti will resign after his coalition lost the support from the People of Freedom party led by former Prime Minister Berlusconi, who also announced that he will run for Prime Minister in the February elections. After this announcement Italian equity markets dropped 3%, borrowing cost soared and the Euro dropped by 50 points, I think that pretty much sums up the thoughts of investors on the Italian situation,  Monti is a very well thought off technocrat who was brought in to stabilize the Italian economy and with him leaving investors are not very happy with the thought of Berlusconi running the country again, at least there would be great parties back in parliament if he wins the election. And I wonder why I have no confidence that current EU leadership has any idea of what they are doing.

The Canadian Dollar had its biggest move of the last week at 5:00 pm on Friday after the markets were closed, the announcement that the Federal Government would allow the takeover of Nexen and Progress by foreign state owned companies gave the Loonie a big boost, I will be interested to see if we can stay  at these levels or will it jump back above the .9900 level. The markets going forward will also look at the new rules that Industry Canada will come up with when other state owned companies want to buy Canadian companies in the future, kind of like closing the barn door after the horse left but what can you do.

With the Monti announcement and the concerns about Europe I would be surprised if North American equities start out higher, I think the early pressure will push USD.CAD higher. Later this week we get the US Federal Reserve announcement on interest rates and we will watch with interest what they the Fed says about the US economy. For today I think that US Dollar buyers should take advantage of these rates and buy some forwards, short-term US Dollar sellers need to think about leaving their orders at the .9900 level as this should be the extent of any pullback today.

 

Have a great week

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9876			0.9927
CAD/USD		1.0124			1.0063
EUR/USD		1.2909			1.2928
EUR/CAD		1.2751			1.2835
STG/CAD		1.5852			1.5908
AUD/CAD		1.0357			1.039
CAD/JPY		83.19			82.93
CAD/CHF		0.9458			0.9414
CAD/HKD		7.8242			7.7862
CAD/CNY		6.3171			6.2675
CAD/MXN		12.991			12.9776
Commodities
Gold		$1,714			$1,697
OIL		$86.47			$86.10
Option Volatility
Canada
O/N		6.58%			5.94%
1 Week		5.21%			5.59%
1 Month		5.12%			5.22%

 

 

 

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%