I am massively short the USD.
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What would be the catalyst to kick off a USD bear trend? Right now the US economy is holding up well compared to most of the world, USD rates are relatively high and among the last places to find positive yields. The Fed might panic, crash rates to zero, restart QE etc. if risk sells off - but Trump is so desperate to gun the markets into 11/2020 that he's bargained with the Chinese for a "trade deal win" in exchange for silence on Hong Kong. When eventually announced it'll trigger a major rally in the short to medium term.
So looking to the next 1-2 years, either things fall apart globally and USD gets a flight to safety bid, or the economy keeps bumping along, Fed stays relatively tight (vs other CBs), trade war goes cold, and the fear trade gets unwound. Long USD seems more likely.
So looking to the next 1-2 years, either things fall apart globally and USD gets a flight to safety bid, or the economy keeps bumping along, Fed stays relatively tight (vs other CBs), trade war goes cold, and the fear trade gets unwound. Long USD seems more likely.
This isn't true at all. Our federal debt to GDP level is where the US levels used to be before the economic crash ( and the US explosion of new debt ), our housing markets remain strong with almost no exposure to China ( the whole idea that it's Asians propping up out housing market is a myth that doesn't stand up under any real statistical analysis; maybe Vancouver in isolation is an exception ). Toronto is booming with huge growth in the IT sector. Canadian Oil producers already crashed ( many stocks down 70-90% ) the impact is already baked in ( overdone really ).
$CDN/$US got as high as $1.06 before Oil cratered. At $0.75 it has a lot of potential/room to rise as Canadian interest rates are likely going to go higher relative to US rates now. I think $0.80-$0.82 is likely within a year just on interest rate policy alone.
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There are numerous potential issues in the US. Even if nothing bad happens, the interest rate policy in Canada is far more likely to result in steady or higher interest rates then the US. That in itself will be bullish for $CDN/$US all other things staying equal.
When 2009 occurred, within 2 years Canada had higher interest rates then the US and $CDN/$US briefly went as high as $1.06. The government then took immediate measures to drop the dollar for trade reasons.
After reading your post, the term “Purchasing power parity” popped into my mind. I recalled that Canada used to have an significant advantage over the US, meaning one used to be able to maintain a similar standard of living for 30% less dollars in Canada. This is not the case anymore as shown by the chart attached below. The basis for my other statements are from a group presentation by a respected financial planner. Let me know if you want the source material for this presentation and I will look it up on my other computer when I get back home.
https://stats.oecd.org/Index.aspx?DataSetCode=CPL
https://stats.oecd.org/Index.aspx?DataSetCode=CPL
... And Seinfeld was the #1 one sitcom for years, probably still is.
And what was it about again?
Bought 2 MCD @ .7503 average on relative strength and destriero’s call. Stop .7494, just beyond a recent 30 minute bar low. Objective .7520, just beyond a monday’s intraday high, for this day trade. If neither stop or target is hit by noon, ET, I will exit this trade.
There goes my week’s drinking money! Stopped at .7494. The larger picture such as other currencies, equity indexes, and US bonds being down is seemingly the relevant factor here.
S
SPX Blaster
His call is over the period of a year or so. Not a day trade.
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