GFX Morning FX Commentary November 14th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9970-1.0040

Today’s expected range for the Canadian Dollar against the Euro is 1.2700-1.2775

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

The US Dollar is marginally weaker this morning as the Euro is higher on reports that the EU has agreed to give Greece an extra two years to sort out their mess and there are newspaper reports that Germany is in favour of releasing the full bailout payment that is due to Greece sooner than later. This news may take the focus off a possible Greek default and once again put the focus back on Spain, will they or won’t they take an aid package, the Euro is far from being out of the woods just yet.

Sterling is also higher this morning as the October inflation report came in much higher than expected. Just what the UK needs, inflation jumping higher, a stronger Pound to hurt the export market and a Central Bank that will be under pressure to raise interest rates. Hopefully this will be a one month aberration and not a continuing problem.

The Canadian took another run at parity last night and again cannot seem to hold on to the move, as I mentioned yesterday I think there is just too many US Dollar sellers between 1.0000 and 1.0025, I think short term USD.CAD will get above the 1.0025 level but it may take a few more runs at it to get there. With no economic reports due out today the Loonie will follow the equity markets and with North America poised to open to the downside I think USD.CAD will fall back to trade below parity, if we see equity markets recover and move into the positive then USD.CAD will likely try and take out the 1.0020 level at some point.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0006			0.9994
CAD/USD		0.9994			1.0006
EUR/USD		1.2713			1.2709
EUR/CAD		1.2721			1.2702
STG/CAD		1.5919			1.5863
AUD/CAD		1.04			1.0398
CAD/JPY		79.48			79.43
CAD/CHF		0.9468			0.9483
CAD/HKD		7.722			7.7354
CAD/CNY		6.2235			6.2291
CAD/MXN		13.2307			13.1965
Commodities
Gold		$1,727			$1,735
OIL		$85.19			$85.88
Option Volatility
Canada
O/N		8.25%			7.50%
1 Week		6.25%			7.00%
1 Month		6.44%			7.00%