GFX Morning FX Commentary, November 14th, 2012

Good Morning,

Today’s expected range for  the Canadian Dollar against the US Dollar is .9970-1.0050

Today’s expected range for the Canadian Dollar against the Euro is 1.2720-1.2800

Today’s expected range for the Canadian Dollar against Sterling is 1.5860-1.5940

The US Dollar is mixed in narrow trading conditions as the currency markets have ignored mass demonstrations against austerity in almost every EU country. In Spain the demonstrations started at midnight and have led to over 30 arrests, I just get the feeling that something is going to push this situation past the tipping point and the violence is going to get out of hand.

Sterling is a little lower this morning as the Bank of England lowered it GDP growth forecasts, with Canada and other countries announcing higher deficits because growth rates will be lower, you get a sense that the global economic outlook is not that good and we should start to see this reflected in equities.

It is groundhog day once again for the Loonie, tried for a breakthrough above parity but could not get through, I still favour a break higher for USD.CAD but it is certainly having a tough time at the moment. Today’s trading will be dominated by the US Retail Sales report for October (expecting a decline of 0.3%) and the Producer Price Report for October (expecting a rise of 0.1%), the US numbers have been very good lately but I get a sense from the market that investors are still casting a wary eye on the US and if we get a single bad number they will hit equities hard and push the USD higher. The retail sales report will be affected by Hurricane Sandy, the number will be lower as people affected by the hurricane will not be spending in the short-term, that needs to be taken into account when looking at the number, next year spending will be higher in these regions as the rebuilding starts. I think will be have a busy day as the financial markets are getting more and more nervous.

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0006			1.0006
CAD/USD					0.9994
EUR/USD		1.2732			1.2713
EUR/CAD		1.2742			1.2721
STG/CAD		1.5873			1.5919
AUD/CAD		1.0428			1.04
CAD/JPY		80.01			79.48
CAD/CHF		0.9442			0.9468
CAD/HKD		7.7447			7.722
CAD/CNY		6.2237			6.2235
CAD/MXN					13.2307
Commodities
Gold		$1,721			$1,727
OIL		$85.51			$85.19
Option Volatility
Canada
O/N		8.62%			8.25%
1 Week		6.27%			6.25%
1 Month		6.31%			6.44%