Personal Finance

The Canadian Dollar and its Ups and Downs

  • Last Updated:
  • Mar 16th, 2015 1:54 pm
Tags:
None
[OP]
Sr. Member
User avatar
Nov 23, 2010
687 posts
116 upvotes
Montreal

The Canadian Dollar and its Ups and Downs

This thread is about discussing the Ups and Downs of The Canadian Dollar (aka The Loonie) and Share info that impacts its Rate.

PS: the previous Thread got deleted by the Forum Admins because some members used Offensive Language. Please do NOT do the Same Mistake again.
307 replies
Deal Addict
Feb 2, 2011
1616 posts
266 upvotes
Ottawa
Don't understand why the entire thread was deleted. Can't you just remove the offending post?

On topic: needs to go up so I can go on vacation down south damnit!
[OP]
Sr. Member
User avatar
Nov 23, 2010
687 posts
116 upvotes
Montreal
Unfortunately, the RFD Admin removed it. I was sent a message advising me of that. I wish they had alerted me before taking such a Drastic Action. Hope this will be a Lesson to those involved.

On topic: Feds taper did more harm than good. It does not seem that the US economy is doing that well... But the fact of the matter is the Loonie is slipping... Looks like 85 cents is the next stop.
Deal Addict
User avatar
Jun 28, 2007
3864 posts
1026 upvotes
radiko wrote: Unfortunately, the RFD Admin removed it. I was sent a message advising me of that. I wish they had alerted me before taking such a Drastic Action. Hope this will be a Lesson to those involved.

On topic: Feds taper did more harm than good. It does not seem that the US economy is doing that well... But the fact of the matter is the Loonie is slipping... Looks like 85 cents is the next stop.
Just my opinion, but I think the Fed is going to continue incrementally tapering - Yellen is eager to remove the excess stimulus from QE and the entire Board of Governors remains concerned about the potential of asset price bubbles in the US stock market. Because the BoC has removed its hiking bias, it is continuing to draw capital flows back to the US - not just from Canada but as we're seeing - from emerging markets as well. Of course, the Fed does not care at all about the rest of the world in so far as its affect on the US - their mandate is strictly US and based on their observations, the US economy is healthy enough to continue requiring tapering.

While I agree with you that the C$ could settle at 85, I also think if this emerging market rout continues, that the C$ could easily get to 80 by mid year because as a commodity based currency, it will just get caught up in that wave.

However, a lower C$ should be remedy in and of itself for the Canadian economy - it should help to stimulate exports and it should help to increase inflation - both would allow the BoC to return to its hiking bias (maybe by 2015 or 2016) and that in and of itself would probably allow the loonie to get back up to its fundamentally fair value of around 90-94 US cents. Of course, there's no way parity is returning anytime soon - which is too bad for those cross border shoppers!
[OP]
Sr. Member
User avatar
Nov 23, 2010
687 posts
116 upvotes
Montreal
gomyone wrote: However, a lower C$ should be remedy in and of itself for the Canadian economy - it should help to stimulate exports and it should help to increase inflation - both would allow the BoC to return to its hiking bias (maybe by 2015 or 2016) and that in and of itself would probably allow the loonie to get back up to its fundamentally fair value of around 90-94 US cents. Of course, there's no way parity is returning anytime soon - which is too bad for those cross border shoppers!
End of 2015 or beginning of 2016 is a fair estimate as it would be right after the Canadian Fed Elections (on or before October 19, 2015). The Cons need a lower Loonie to create more jobs in order to win the Elections.
Deal Fanatic
User avatar
May 11, 2009
6869 posts
3385 upvotes
Debtario
This really sucks. Guess I should buy now before things get even worse. Watched the price of a Watch jump from $206 to $216 last 2 weeks, ugh!!!!
"I possess a device, in my pocket, capable of accessing the entirety of information known to man. I use it to look at pictures of cats and get in arguments with strangers"
Deal Addict
User avatar
Jun 28, 2007
3864 posts
1026 upvotes
old sparks wrote: On the other hand, Pimpco is planning to "buy the dips" CAD$ in 2014.

https://canada.pimco.com/EN/Insights/Pa ... using.aspx
I somewhat agree with what PIMCO is saying - canada's housing market is unlikely to crash and disinflation and slower growth will likely dissipate over the next 24 or so months as Canada leverages off the recovery in the US. So for a foreigner or USD based investor, the lower loonie makes Canadian assets somewhat of a great buy right now, especially since the C$ will probably appreciate back to a more fundamentally fair value of around 90-94 over the longer term. However, that's not likely to happen anytime soon, and I wouldn't be surprised to see the loonie go the opposite direction in the near term and perhaps bottoming out at around 85 or so.
Deal Addict
Jan 11, 2004
1277 posts
161 upvotes
85 cents would be amazing :)

It was just co-incidence but it was humorous how the loonie capitulated in sync with a bullish prediction from the one who remains unnamed.
[OP]
Sr. Member
User avatar
Nov 23, 2010
687 posts
116 upvotes
Montreal
The CAD is up today, but no for so long. Once the North American Stock Exchanges open in NYC and Toronto, Poloz's friends will bring it down...
Deal Addict
User avatar
Feb 25, 2004
1712 posts
187 upvotes
416
So, where's the best place to buy 10,000 American Dollars (USD) today without opening some fancy ForEx trading account with XE / OANDA ?
Banned
User avatar
Feb 15, 2008
26318 posts
3231 upvotes
Calgary
I'll repeat it again, in the hope that there won't be spam -- there is an outsized (on a historical basis) speculative short interest against the Canadian dollar (see CoT reports). Fundamentally the Canadian dollar should be at least par, if not higher due to Canada's robust export capacity and general state of trade surpluses. A slowing of or even cessation/reversal of expansion of credit in CAD$ terms, which appears to be in the process of occurring, is highly favourable to the Canadian dollar.

63 cents was the result of Canada being in a severe commodities depression, and a very strong US dollar. Over the long term, I expect a full inversion of the 63 cent bottom (ie: 1/0.63) to occur, at least temporarily, as the US continues its long-term path of weakening as an economy, while Canada continues powering forward. Despite this recent short-term set-back, the secular bull market for the Canadian dollar is still well intact.

With such an abundance of mis-placed negative sentiment, reversals can be sharp and outsized. Especially if BoC policy actions do not live up to the very significant expectations that have been telegraphed to the market by the BoC governor.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Addict
Feb 10, 2013
4340 posts
935 upvotes
Richmond
is Boc hoping us companies will come and invest up here while their encomomy is dying? . a strong dollar imo equals lower inflation and decent for min wage workers. I guess Boc wants Canada to go more in debt offering welfare to folks who cannot afford food due to inflation
Banned
User avatar
Feb 15, 2008
26318 posts
3231 upvotes
Calgary
bluebellrose wrote: is Boc hoping us companies will come and invest up here while their encomomy is dying? . a strong dollar imo equals lower inflation and decent for min wage workers. I guess Boc wants Canada to go more in debt offering welfare to folks who cannot afford food due to inflation
Most of us have only lived in an era of a weak CAD$. So the tendency is to believe that the norm is weak. That's why you see a lot of bias towards weakening that has little fundamental support in the actual data itself.

Yes, the CAD$ may very well go up significantly, but this is actually good for business as it keeps the cost of capital low. Despite the weakening of the CAD$, there's been no capital flight, the bond market has actually gone up representing a vote of confidence in the CAD$ despite the ~10% loss experienced in the past year.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Addict
User avatar
Feb 25, 2004
1712 posts
187 upvotes
416
"So, where's the best place to buy 10,000 American Dollars (USD) today without opening some fancy ForEx trading account with XE / OANDA "

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)