GFX Morning Commentray

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2425-1.2525

Today’s expected range for the Canadian Dollar against the Euro is 1.3660-1.3760

Today’s expected range for the Canadian Dollar against Sterling is 1.8925-1.9025

This will be the last “From the Desk of GFX”, as of Monday it will be called “From the Desk of AFEX”, life is made of many adventures and we at GFX are on to the next one. It has been a great privilege to write this commentary over the last 10 years and I want to thank all readers for all their input, I hope that you found some value in it and it helped you to make some informed choices when doing your FX transactions. I am greatly looking forward to my time at AFEX, we will be able to accomplish great things.

The US Dollar is stronger again this morning as the currency market digests the ECB stimulus plan and gets ready for today’s US Employment report (the Canadian report is next Friday). Yesterday saw the ECB announce their stimulus program which will consist of some 60 Billion Euro’s worth of bond purchases as they want to see inflation rise back up to the 2.0% level, I have to believe that this program will at least last two years and possibly longer, Europe is such a mess at the  moment. EURO.USD is down trading at 1.0940 another 11-year low for the currency pair, when the Euro was first introduced on January 1^st 1999 the Euro traded at a discount to the Greenback, I have to think we will see those levels again.

Nothing new to report on the Loonie, once again it is range trading and anytime we see the Loonie garner some strength against the Greenback it seems to give it right back. With the weakness in the Euro and Sterling at the moment, the Loonie continues to make gains against those currencies. Euro buyers should be looking at forward contracts at these levels, if the Loonie does again weaken against the US Dollar we will see it lose ground to Europe as well.

As mentioned, trading today will be dominated by the US Employment report for February, we are expecting 245k new jobs to have been created ( down a little from last month of 257k). Given the latest US economic data I think the number has the potential to surprise to the topside so we could see a jump in USD.CAD, regardless of what the number is I think we will see some enhance volatility. We also have Trade data due out for both Canada and the US so it should be a busy morning.

Just  reminder that we will be closing the office today at 3:00 pm to facilitate our move to the AFEX offices.

 

Have a great weekend, warm weather is on the horizon!!

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Thursday
USD/CAD		1.2466			1.2416			1.2506
CAD/USD		0.8022			0.8025			0.7996
EUR/USD		1.095			1.1043			1.1025
EUR/CAD		1.3654			1.3714			1.3793
STG/CAD		1.8914			1.8928			1.9049
AUD/CAD		0.9735			0.9695			0.9719
CAD/JPY		96.26			96.75			96.04
CAD/CHF		0.7835			0.78			0.7787
CAD/HKD		6.1985			6.2243			6.1796
CAD/CNY		5.0221			5.0452			5.0089
CAD/MXN		12.2027			12.1684			12.1734
Commodities
Gold		$1,195			$1,200			$1,200
OIL		$50.83			$52.11			$52.11
US DOLLAR INDEX
OPEN		96.72			96.2			96.38
US 10YR YIELD		2.12%			2.13%			2.10%

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2400-1.2470

Today’s expected range for the Canadian Dollar against the Euro is 1.3740-1.3830

Today’s expected range for the Canadian Dollar against Sterling is 1.8950-1.9020

The US Dollar remains supported as yesterday’s secondary data was positive in nature, the Greenback continues to make new-multi year highs against the Euro. Financial markets await the announcement this morning from the ECB on interest rates, it is expected that they will provide more information on their stimulus program that is expected to start in the next few weeks. I don’t think they will say anything today that will give the Euro any real strength, there is still a lot of uncertainty in the Euro market. The Bank of England also reported on interest rates this morning and as expected they did not make any changes, Sterling has not shown any real reaction to the announcement.

I read a very interesting article in my hometown newspaper the Hamilton Spectator yesterday and it dealt with the growing oil glut in the US. Presently the US produces and imports 1M barrels of oil a day more than it needs, some 80% of this oil surplus is stored at the large oil facility in Cushing, Oklahoma. Through independent research that facility is almost 2/3 full and running out of space to store the surplus oil rapidly. The story went on to argue that if the US runs out of storage capacity then more US producers will go offline, imports will be curtailed and the price will plummet. If this scenario unfolds as stated the price of oil would plummet the Canadian Dollar get hit in a big way, I think I will start to pay a little more attention to the oil inventory numbers every month, if they continue to escalate it could have a big impact on our currency.

The Canadian Dollar had a strong day after the Bank of Canada report yesterday, it had a rapid move of about 70 pips lower against the Greenback and has continued to slowly rally overnight, it had  a great day against the Euro and Sterling as weakness in those currencies have really helped the Loonie. EURO.CAD has not been this low since June of 2013, I think Euro buyers would be well served by looking at some forward contracts. Overall I still want to see a sustained break of 1.2300 before I can see a rally for the Loonie unfolding, at this time we are still range trading without any clear direction.

In addition to the ECB announcement due shortly we have secondary US and Canadian data. After the ECB announcement runs its course through the market, traders will start to position themselves for the US employment report due tomorrow.

Just a heads up our office will be closing at 3:00 pm tomorrow as we get ready for our move over to the AFEX Toronto office, If you need to do a wire try and get it in as early as possible so we can complete the trade.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Wednesday
USD/CAD		1.2416			1.2507			1.2414
CAD/USD		0.8025			0.7945			0.8055
EUR/USD		1.1043			1.112			1.1072
EUR/CAD		1.3714			1.3917			1.3748
STG/CAD		1.8928			1.9195			1.8943
AUD/CAD		0.9695			0.9797			0.7818
CAD/JPY		96.75			95.61			96.36
CAD/CHF		0.78			0.7688			0.7754
CAD/HKD		6.2243			6.1772			6.2236
CAD/CNY		5.0452			5.0127			5.0491
CAD/MXN		12.1684			12.0383			12.1485
Commodities
Gold		$1,200			$1,205			$1,199
OIL		$52.11			$50.79			$51.69
US DOLLAR INDEX
OPEN		96.2			95.69			95.95
US 10YR YIELD		2.13%			2.13%			2.12%

 

 

 

 

GFX Currency Alert-Bank of Canada

Good Morning,

Today as expected the Bank of Canada announced that they would keep their key interest rate at 0.75%. In their accompanying statement the Bank made the following observations;

-Total CPI Inflation has fallen as expected and inflation risks are more balanced

-Core inflation remains near the Bank’s target level of 2%

-Global economy is evolving broadly in line with expectations

-oil price shock has had a limited effect on the 4^th quarter growth, biggest effect will be in the first quarter of 2105

-Financial conditions in Canada had eased materially including the Canadian Dollar, weak dollar will mitigate the oil price shock

This is a positive statement as the Bank does not give any indication that future rate cuts are needed but given their lack of guidance going forward this does not surprise me. I am concerned about the comment that the full impact of the oil price will be felt in the first quarter, for this reason I think another rate cut is still on the table.

As you would expect from this announcement USD.CAD has dropped about 70 points. At the same time the Loonie is showing real strength against the Euro and Sterling, we have not seen rates this good for currency buyers in a long time.

The next Bank of Canada interest rate announcement will be April 15^th where they will also release their Monetary Policy Report

Mike

 

 

 

 

GFX Morning FX Commentary

Good Morning,

Welcome to Bank of Canada Day where anything can happen, the excitement is building!!

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2450-1.2550

Today’s expected range for the Canadian Dollar against the Euro is 1.3920-1.4020

Today’s expected range for the Canadian Dollar against Sterling is 1.9190-1.9290

The US Dollar is marginally stronger this morning as the market get setup for the European Central Bank announcements on interest rates due out tomorrow. EURO.USD opens the day down at 1.1120 a six-week low for the common currency, the trend for a lower Euro remains in place for the near-term.

In other Central Bank new last night, the Central Bank of India surprised the markets by cutting their interest rate to 7.5%, Central Bank Governor Raghuram cited weakness in Asia’s third-largest economy as the reason behind the move. As you would expect the Indian Rupee market was quite volatile and CAD.INR reached a high 49.50 in overnight trading. This move may represent a good opportunity to buy some Rupee’s.

The Canadian Dollar is for the most part unchanged against the US Dollar this morning as we continue to range trade ahead of the Bank of Canada this morning. I don’t think I can give any real guidance as to what they will do today, last month the surprise rate cut caught the market off guard and the currency lost 3% as a result of that announcement. Even though Governor Poloz hinted last week that the rate cut buys him time to look at the economy no one can say with any certainty what he will do today. If he surprises or hints of another rate cut then USD.CAD is above 1.2600 in a flash, if he says the economy looks good and no further cuts are needed then we are down at 1.2300 pretty quick. Either way I would think that volatility will be at a premium, make sure you get your orders in before the 10:00 am announcement. As always I will send out a currency alert shortly after the announcement.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Tuesday
USD/CAD		1.2507			1.2525			1.2481
CAD/USD		0.7945			0.7985			0.8012
EUR/USD		1.112			1.1164			1.1173
EUR/CAD		1.3917			1.3982			1.3975
STG/CAD		1.9195			1.9248			1.9177
AUD/CAD		0.9797			0.9775			0.9761
CAD/JPY		95.61			95.66			95.85
CAD/CHF		0.7688			0.7669			0.7697
CAD/HKD		6.1772			6.17			6.1892
CAD/CNY		5.0127			5.0085			5.0197
CAD/MXN		12.0383			12.0355			12.0355
Commodities
Gold		$1,205			$1,207			$1,202
OIL		$50.79			$50.29			$50.29
US DOLLAR INDEX
OPEN		96.69			95.53			95.4
US 10YR YIELD		2.13%			2.10%			2.12%

 

 

 

 

GFX Morning FX Commentary

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.2475-1.2575

Today’s expected range for the Canadian Dollar against the Euro is 1.3960-1.4060

Today’s expected range for the Canadian Dollar against Sterling is 1.9210-1.9310

The US Dollar is marginally stronger this morning against the majors, the Greenback continues to benefit from yesterday’s stronger than expected manufacturing data. EURO.USD is looking to set new multi-year lows as the rate has hit 1.1180 in overnight trading,  Euro markets remain nervous as a they await the ECB interest rate announcement on Thursday. Sterling is also weaker this morning despite a slightly better than expected construction report.

The Canadian Dollar is unchanged from our Toronto close on  Monday, I get a sense that Canadian Dollar traders are squaring up their positions ahead of the Bank of Canada announcement tomorrow. Given the lack of guidance that the bank is providing and the surprise interest rate cut at the last meeting traders are getting nervous on what the Bank will do next. I look for USD.CAD to range trade ahead of the GDP report later this morning.

 

Up today we do get as mentioned the Canadian GDP report for both the month of December and the 4^th quarter. On an annualized better we are expecting the 4^th quarter reading to show a growth rate of 2.0% which would be down from the 3^rd quarter of 2.8%. On a monthly basis we are expecting GDP to have grown in December by 0.3% up from the negative reading in November of -0.2%. I think we will see some volatility around this release and given the poor Retail Sales report from December my expectation would be for a disappointing number which should push USD.CAD higher.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening			4pm close Monday
USD/CAD		1.2525			1.25			1.2534
CAD/USD		0.7985			0.8			0.7978
EUR/USD		1.1164			1.1228			1.1182
EUR/CAD		1.3982			1.4041			1.4021
STG/CAD		1.9248			1.9265			1.9264
AUD/CAD		0.9775			0.9736			0.9739
CAD/JPY		95.66			95.75			95.79
CAD/CHF		0.7669			0.7644			0.7644
CAD/HKD		6.17			6.1781			6.1624
CAD/CNY		5.0085			5.0163			5.0023
CAD/MXN		12.0355			12.0059			11.996
Commodities
Gold		$1,207			$1,214			$1,205
OIL		$50.29			$48.89			$49.82
US DOLLAR INDEX
OPEN		95.53			95.18			95.51
US 10YR YIELD		2.10%			2.00%			2.08%