GFX Morning FX Commentary November 12th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9970-1.0035

Today’s expected range for the Canadian Dollar against the Euro is 1.2670-1.2770

Today’s expected range for the Canadian Dollar against Sterling is 1.5830-1.5930

The Us Dollar is marginally weaker this morning, the Euro is approaching a two month low as the risk of Greece running out of funds increases. The have a 3 Billion one and 3 month auction tomorrow and Friday they have a 5 Billion redemption coming due. Having passed the austerity budget yesterday amongst riots in the streets Greece should qualify for a 31 Billion Euro payment but the EU is still debating that payment at the moment and it may not arrive in time to avoid a default. I heard a very interesting comment on CBC this morning ad it was that the Neo-Nazi party is sitting third amongst popular opinion in Greek political polls. If this is true it takes you back to Germany in the early 1930’s when unemployment was high, there were riots in the streets, inflation was rampant , the government was required to make massive payments for the 1^st world war and the Deutschemark was being devalued. You can see the analogies to present day Greece, I am not sure the extreme parties would ever come to power today but it just highlights how difficult the task ahead for the Greeks and Europe is .

The Canadian Dollar is still unable to hold any attempts to fall below par, every time USD.CAD tries to break above 1.000 it is rebuffed and falls back. I think this is nothing more than the fact that there are so many US Dollars sellers at these levels that it will take a few runs to break through. Given that the Loonie is not really rallying either so I think USD.CAD will trade back and forth around par for the next little while. Equity markets are pointing higher to start the week, if they can hold that strength then we may see USD.CAD fall back towards .9970.

Just a quick reminder that today is the observance of Remembrance Day so the banks are closed, we will not be able to affect any wire payments today.

Have a great day

Mike

Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9994			1.0003
CAD/USD		1.0006			0.9997
EUR/USD		1.2709			1.2718
EUR/CAD		1.2702			1.2726
STG/CAD		1.5863			1.5944
AUD/CAD		1.0398			1.0393
CAD/JPY		79.43			79.12
CAD/CHF		0.9483			0.9469
CAD/HKD		7.7354			7.7421
CAD/CNY		6.2291			6.2443
CAD/MXN		13.1965
Commodities
Gold		$1,735			$1,732
OIL		$85.88			$84.85
Option Volatility
Canada
O/N		7.50%
1 Week		7.00%
1 Month		7.00%