Loonie ... the infamous USD/CAD

Yes I agree. But the economy is booming and Dodge is a hawk on inflation, so there's an outside chance. Also an outside chance the Fed will get concerned about housing and possible recession and drop it a quarter.

Oil is off its recent high ($67) and down to $64, but that's not enough either to discourage the oil bulls or to have much influence on the pooled monthly price. No immediate relief in sight for USDCAD.
 
Quote from Cdntrader:

hard to imagine them raising rates with the dollar on fire. They will probably wait to see what kind of fallout it has on exports.

bwtfdik
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One might think that at a glance, but take a look at NZD/USD. They have been raising rates despite their huge appreciation. Rumor in the papers here is that rates will continue to go up.

Best regards,
MK
 
Personally I've been riding GBPCAD down, it dropped 250 pips today, expect it to go to 2.02. Took my profit, now waiting for it to get close to resistance at about 2.1400 before I short it again. Also longed USDJPY at 121.59, shorted at 121.78, longed again at 121.59, target 121.80: the carry-trade yo-yo.
Not a bad day: had to withdraw $7000 for real-world needs, have made half of it back already. Not much I know for those of you who can afford to play for $1000 a pip, but it pays the rent.

Staying away from USDCAD until late June.
 
1.05?? not far away now guys and it wasnt only a few days ago all the experts on dailyfx were saying there would be a long drawn out correction to at least 1.10

i stuck to my guns and watched the graphs like a hawk, the pattern never faltered and was repetition after repetition. small clawback then drop, time and time again, i see 1.04 soon, maybe within a fortnight, as usdoutlaw predicted a few months ago
 
And the pundits are now finding all kinds of reasons for it, of course. Seems it's rational after all - not just kids throwing spaghetti. Dodge talking about upping rates some more. Apparently not concerned about effects of high loonie on exports points out that loonie has been dropping for 4 years now and Canadian industry has adjusted, plus it makes American inputs a lot cheaper so benefits as well as costs.

Meanwhile my GBPCAD short is doing very nicely: 500 pips in 2 weeks. I expect it will get down to last year's low at least - another 800 pips to go. Combination of booming Canadian economy, oil still in the mid 60s + political uncertainty in Britain.

I was reading yesterday that tar sand extraction is only economically feasible as long as oil stays over $40. A US recession (sure looks like it's heading that way) could cause oil to drop below that and back to the $30-35 level where it "should" be on the historical trend. At that point the Canadian ecconomy goes south for the winter and the whole loony bubble could burst. I'm not curious about how low - I think it will stay low until the effects on the Canadian economy start to show, which I now think may not be until fall. At that point I might go long. Not going to short USDCAD down here in Terra Incognita.

US indexes all spiralling out of control while the economy stalls - sure looks like a lot too much money chasing increasingly dicey assets. Resources likewise. Canadians being a cautious bunch, I think they are preferring to invest all the loonies they got for Inco & Falconbridge back home where the TSX is backed by fundamentals. Will start buying up US equities after the markets catch up with reality (traditionally October), sending USD up up up. I'm still predicting (a) US recession (b) $40 oil by the end of the year and (c) USD staging a big comeback as the recession cuts the trade deficit.

Have been making a few bucks on the side waiting for USDJPY to get close to 122 and then shorting it. Not looking so good today -but I think the exuberance won't last.

USDJPY is all carry trade, anyone who buys at 122 for the interest differential is crazy. Another big meltdown in the works, especially with USD now losing ground to most other currencies.
 
10% rise in 2 months is unprecendented. I don't really see how you can adjust to that.

Although I dont think it's a bubble.
Loonie will definetly will reach $5 per loonie in comming years. All the US will belong to Canada. Eventually the US will ask to become a canadian province but will be refused.
 
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