GFX Morning FX Commentary November 16tth, 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 1.2740-1.2820

Today’s expected range for the Canadian Dollar against Sterling is 1.5840-1.5900

The US Dollar is marginally stronger this morning as investors are casting an eye on the upcoming negotiations between the President and the Republican members of Congress on the upcoming fiscal cliff, investors are also becoming increasingly concerned with the reports of Israel massing troops on the border of Gaza to try and stop the rocket fire. Of interest to me in this situation is what will Egypt do if Israel invades? With the new Islamic government in Cairo will they come to the support of the Palestinians with military force or will they just stand by and do nothing? Any escalation by Egypt will make financial markets very nervous as it could lead to a full scale blowup in the Middle East.

Something else that I will keep an eye on is the testimony today by ex-CIA head General Petraeus to Congress. I really don’t care who he was sleeping with but if there is even a hint that the Obama administration had information on the attack in Libya that killed the US ambassador and did not disclose it before the election the Republicans will smell blood in the water and Washington will grind to a halt, no business will get done. Financial markets will get hit hard if this thing blows up.

The Canadian Dollar is still stuck in the same range and really doing nothing, a full scale attack by Israel and a military intervention by Egypt will I think be good for the Canadian Dollar as the price of oil should skyrocket. We do have some secondary US data out today so we may get some enhanced volatility but for the most part I would expect that USD.CAD will stay in this range and just continue to follow the stock market.

Have a great weekend

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0019			1.001
CAD/USD		0.9981			0.999
EUR/USD		1.2731			1.2764
EUR/CAD		1.2756			1.2782
STG/CAD		1.588			1.5864
AUD/CAD		1.0331			1.0327
CAD/JPY		80.78			81.15
CAD/CHF		0.9439			0.9417
CAD/HKD		7.7164			7.7212
CAD/CNY		6.2207			6.2237
CAD/MXN		13.2238			13.2424
Commodities
Gold		$1,709			$1,723
OIL		$85.49			$86.39
Option Volatility
Canada
O/N		5.22%			7.79%
1 Week		5.57%			5.93%
1 Month		5.99%			6.18%