Daily FX Commentary

By Warren Hayhoe,

Columnist, Canadian Money Magazine

Central Trader, Jameson Bank

 FX Commentary, December 12th, 2011

Expected USD/CAD range: 1.0190-1.0300
Expected GBP/CAD range: 1.5975-1.6085
Expected EUR/CAD range: 1.3540-1.3645
Expected GBP/USD range: 1.5540-1.5715
Expected EUR/USD range: 1.3180-1.3325
Expected USD/JPY range: 77.50-78.20

 
Oil opened at $99.41 currently $97.89

Gold opened at $ 1712.80, currently $1670.50

Morning Observations:

Late yesterday in Brussels’ a so called working dinner turned into an all night session for the EU leaders.  The outcome of this all night session was the EU members agreed to a new agreement called a “fiscal compact”.  The main points of which are new caps on annual structural deficits, “automatic consequences” for countries that exceed these said limits and a further €200bn from the IMF for bailouts.  In short they argued over espressos and lattés to come up with new economic limits and penalties seeing as the original limits were all but ignored and went unpunished.  The leaders expect us to believe that this won’t happen again with this new “fiscal pact”?  It should also be noted that this deal was signed by everyone but the UK. Maybe, sometimes it is a good thing to be alone on an island.

Moody’s has downgraded France’s 3 big banks, citing the banks’ increasing difficulties with raising additional funding and a worsening economic outlook.  They did also not that the banks would likely benefit from state support if the crisis deepens.

This morning’s CAD trade balance came in lower than expected citing a slowdown in exports. The US trade balance came in bang on market expectations.

We now wait for further details from Brussels and dare we say it, the US military on what it plans to do about Iran.