CAD Opens Lower Amid GDP Slowdown; Bitcoin Surges on Strategic Reserve Speculation

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3930-1.4130

Euro                 1.4690-1.4910

Sterling            1.7670-1.7880

WTI Oil (opening level) $69.26

The CAD is opening at 1.4005 ( 0.7140) 

I was delayed getting to my computer this morning, so I get to include the news from this morning in Canada.

Statistics Canada’s gross domestic product report says the economy grew at an annualized rate of one per cent in the third quarter, down from 2.2 per cent in the second quarter.

The figure is in line with economists’ expectations, but lower than the Bank of Canada’s October forecast of 1.5 per cent.

Real GDP per capita fell 0.4 per cent in the quarter.

So the CAD is trading around 1.4037 now

 I have been trying to get my head around the move by Bitcoin since the Trump election. I heard a nice podcast given by Peter St. Onge on the topic and I think I understand it better now. At the beginning of November Bitcoin was trading just below 70 k. Today around 97 k. Why the gain of 38%?

It appears that Trump is considering adding 5% of the strategic reserve that the US Treasury maintains (on a basket of currencies and gold) adding Bitcoin to that mix.

That would be around a 65 billion investment in the virtual currency by the USA government. That is huge!

4 years ago I wrote about Bitcoin needing trust and adoption in order to be accepted as a payment method. Since then, El Salvador has adopted it as their national payment mechanism. So it has had time to play out and case studies can be done on it. If Trump thinks that it should be added to the strategic reserve then it will have great adoption and acceptance in the world market, and with that greater value.

It will be interesting to see how this plays out.

Key points today ( remember the USA is concentrating on Black Friday today)

·    Equities: Asian down on geopolitical risks, Europe rose on softer semiconductor curbs

·    Volatility: VIX steady at 13.90, VIX futures dipped slightly

·    Currencies: JPY surges on Tokyo CPI data, USD under pressure into month-end fixing.

·    Commodities: Mixed month with coffee and natural gas seeing the biggest gains

·    Fixed Income: French bonds rally amid Barnier’s budget deal and dovish ECB comments