User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday July 24, 2009 - 12:46:05 GMT
Black Swan Capital - www.blackswantrading.com

Share This Story:
| | Email

To Be, Or Not To Be … In Canadian Dollars?

Key News
• German Business Confidence Rises as European Economy Moves Toward Recovery (Bloomberg)
• U.K. Economy Contracted 0.8% in Second Quarter, More Than Double Forecast (Bloomberg)
• Tightening Credit Becomes Bernanke Bind as Fed Faces Bond Purchase Unwind (Bloomberg)
• Asian markets cheered by US rally; Positive earnings drive Dow to 9,000 (Financial Times)

Quotable
“When any part of the financial system is constrained from taking on risk, the market simply evades these constraints in one of three ways: It innovates around them, it generates or develops new and unregulated parts of the financial system, or it conceals regulatory violations.”

       Michael Pettis

FX Trading – To Be, Or Not To Be … In Canadian Dollars?

As Jack mentioned on Tuesday, we’re in Vancouver speaking at an investment conference. A popular question here, as the case with most conferences and seminars we attend, is:

Which currencies would you want to hold right now for long-term appreciation if you didn’t want to have all your money in US dollars?

To us, based on our current long-term global macro analysis, the answer is not clear. Why? Well because we seem to be at a very important junction; generally speaking, a junction that could lead currencies in one of two directions versus the US dollar – up ... or down.

Based on the inherent risks we still believe to be dispersed throughout the global financial system, it doesn’t make much sense to us to move much money into any currency outside of the US dollar.

(Chart unavailable in text format.)

Of course, this could change. And it could change quickly.

I talked about the S&P 500 on Wednesday – it was trading just below a key resistance level. Considering the sharp move up to that level in the days prior, I thought stocks may have needed a rest. That rest lasted for about two days. Then yesterday there was a breakout move.

The chart above shows the S&P breakout move that’s following through on its substantial rally since March. The chart below is also a daily chart, but it pulls back to a wider time frame to show how much room there is for the S&P to potentially climb. If things play out this way and stocks keep climbing then we likely see similar moves in the currencies.

 (Chart unavailable in text format.)

If the currencies do confirm the breakout in stocks it could mean a major capitulation to risk-taking. It doesn’t have to mean that, but it could become a self-fulfilling move begetting more confidence and more buyers.

Do note that even though stocks surged yesterday, they ran into trouble at the close of the session on worse than expected earnings results out of some key companies. After hours trading saw the S&P sink and erase half of the day’s monster gains. Today stock futures are trying to fight back to yesterday’s intraday highs.

Ok, back to the long-term currency holdings ...

If risk-appetite returns and recovery potential grows, then it’s possible the US dollar is thrown into the fire ... yet again. And at that point it will make sense to move some long-term money into other currencies.

So which other currencies? If global trade is expected to eventually return to “normal” then positioning in a commodity currency may make sense as they would have little financial risk relative to some of the other major currencies.

A speaker here in Vancouver called the Norwegian krone the most attractive currency in the world. While they do have decent fundamentals and potential when the global economy is in working order, I still wouldn’t necessarily go out on that limb. Keep your eye on the krone if you’d like. But to pay some respect to our hosts this week, let’s take a look at the merits of the Canadian dollar ... a major currency with similar fundamental dynamics as the krone.

In just the last weeks there’s been an optimistic tone struck on Canada. The Canadian dollar has not been shy about it either. After clearly pulling back when most other currencies went range-bound, the Loonie has pretty much gained back all the ground it gave up to the buck.

 (Chart unavailable in text format.)

This week we learned that Canadian retail sales increased by larger than had been expected. This is always an optimistic sign as it potentially shows a revival in the consumer and a step towards growth.

Similarly, Canadian imports have increased in volume, indicating that the domestic sector may be on the mend. What’s more, the real estate market in Canada has recovered somewhat – existing home sales jumped 31.5% between the first and second quarter of this year. I’m sure some Canadians will tell you the real estate market is far from out of the woods, but perhaps a majority of the pain has passed.

There’s also been notable strength in the services sector of the economy ... at a time when manufacturing is still slumping. This conveys the important distinction between domestic spending versus foreign spending on Canada’s exports.

The financial services sector in Canada isn’t half bad, either. Canada’s banks have not tip-toed the edge of the abyss ... or gone over the edge like many competing banks in the US and Europe. Are Canada’s financial institutions operating under ideal economic conditions? Absolutely not – the economy in Canada and globally is still soft, yet the industry has remained stable.

Until investors and economists gain a sense of conviction that recovery is imminent, there could still be a lot of question marks for Canada. The Bank of Canada yesterday did some work at cultivating some conviction. In their monetary policy report they noted that Canada is coming out of recession in the third quarter of 2009. Growth estimates were revised upwards as well.

The Bank of Canada’s chief Mark Carney made note, though, on the USDCAD exchange rate. The central bank’s growth revisions revolved around expectations of USDCAD at $1.15. The Canadian dollar is stronger now (USDCAD $1.085) than it was at the beginning of the month (USDCAD $1.16). With that in mind, central bank intervention is on the table. If recovery doesn’t set in earnestly then a strong Canadian dollar threatens to hamper progress.

So, in the relative game we play, there’s a lot to consider when choosing the least ugly in an ugly contest ... as so many casual observers like to quip. A friend of ours, a British Columbia local, had this to say regarding Canada, the loonie and Mr. Carney:

“We had the Greenspan Put - is this the Mark Carney CALL? <YOINK....> "Money for nothing and get your kicks in the groin for free..." - you could just see this coming ...”

Have a nice weekend.


John Ross Crooks III
Black Swan Capital LLC, www.blackswantrading.com

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 20 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales


Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: High Fri-- 12:30 GMT CA- Retail Sales and CPI. Top economic indicators.


  • POTENTIAL PRICE RISK: HIGH Fri-- 14:00 GMT US- Existing Homes Sales. Top Housing statistic.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105