02/26/10 Pylesville, Maryland – I like the Canadian dollar (CAD) more and more. It has some fundamentals that are definitely improving, and some other aspects that are definitely worth considering. Here’s why…
Traditionally, the loonie has been linked with the Australian (AUD) and New Zealand dollars (NZD). Now in the current market, currencies are often linked together by at least one of three elements: They either produce a high yield, they are commodity-based or they are funding currencies for a carry trade.
However, even though Canada is linked with the commodity currencies because of its rich natural resources, it is not a high yielder, nor is it a funding currency. Thus, up to this point, it has not been a real capital attracter.
But its strengthening fundamentals are already reflected. We saw a strong Canadian employment figure at the beginning of February, and last week, inflation nearly hit the official target. We may be looking for a rate increase out of the Bank of Canada.
If retail sales continue to rise and we see decent numbers out of its GDP report coming up at the beginning of March, we may be onto a good trade.
Cheers,
Bill Jenkins
for The Daily Reckoning
Bill Jenkins
Bill Jenkins knows the Forex currency markets inside and out. After 20 years and a string of losses following other people's crack advice, Bill created his own system for cashing in on tiny currency fluctuations between the British pound and the U.S. dollar. Now you have a chance to benefit from his “lifetime” of hard-earned experience. Bill’s advice has led readers to gains of 33% in a week... 70% in four days... and 100% practically overnight. And we've broadened the service to include the euro, yen and other currencies in these volatile trading markets. When Bill is not helping people enjoy big wins with simple currency plays, he's a church minister and owns his own contracting business.
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The Canadian economy is in the midst of a giant real estate bubble with its epicenter in Vancouver BC. Mortgage rates are in the 1-2% area, but you can only lock in a rate for 5 years in Canada, so there is a massive wall of resets forming that will hit some time in the future (still quite a few years out but the tremors will probably hit earlier. Canada has an emerging structural deficit that the incompetent Conservative Party led by the ultra-creepy Stephen Harper has no intention of reining in. Finally, Canada is just as much into the beggar-thy-neighbor sleaziness of competitive currency devaluations as any country out there. I’d be inclined to stay away from the Looney for a good while.
Canada has an emerging structural deficit that the incompetent Conservative Party led by the ultra-creepy Stephen Harper has no intention of reining in. Finally, Canada is just as much into the beggar-thy-neighbor sleaziness of competitive currency devaluations as any country out there
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Enlightening how well you feel in relation to Canadian Dollar More than Just a Commodity Currency. brbr The one thing which i may possibly talk about is when you will apply it like that you will need ready to handle the trouble. brbr I know that this will not be popular as people are quite casual in the world today.