Personal Finance

The Canadian Dollar and its Ups and Downs

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grilw wrote: "So, where's the best place to buy 10,000 American Dollars (USD) today without opening some fancy ForEx trading account with XE / OANDA "
If you could get yourself up to Pearson airport, and have a t-shirt printed up with "I sell Canadian dollars", you could probably do okay standing just outside of Int'l arrivals and convert your money at the spot rate, if not slightly better. But for the rest of us, plunking down the $200 in forex commission at the local bank branch is probably as good as its gonna get.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Did anyone notice this? When the overseas market opens (evening time in Canada) the CAD goes up. But, the next morning it starts to go down after the North American market opens. Invisible Forces are drowning it intentionally.
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radiko wrote: Did anyone notice this? When the overseas market opens (evening time in Canada) the CAD goes up. But, the next morning it starts to go down after the North American market opens. Invisible Forces are drowning it intentionally.
Seems to be the case with gold as well. Which is subject to a lot of speculative forces. As I implored in version 1.0 of this thread, watch those CoT reports that come out every Friday. Every week they seem to show the leveraged speculative fervor against the CAD$ to be getting stronger and stronger. Thus leading to the body of evidence that the recent fall in the CAD$ is not fundamentally driven, but is rather based on traders desperately making large directional bets.

A potential conclusion to come to, is that the overseas speculators have gone to bed, while its the domestic/US speculators who are pounding away at the CAD$ (and gold).
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Australia dollar starting to pick up finally. Might a more meaningful turnaround in the CAD/USD pair be around the corner? Past week or two have been awfully stable. So much for the whole idea that we were going back to 80 cents or whatever the gloom and doomers were claiming, based on some ill-thought out idea of 'fundamentals' (or worse, relying upon fundamentally flawed things like hamburger prices!).
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Oct 15, 2009
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Kanata
Most of the discussion centres around short term CAD/USD. Personally I'm more interested in the long term. Short term forex trading seems far too speculative for me.

My exposure to USD is primarily USD $ US domiciled ETFs e.g VTI. I have no clue where the dollar is going short term. Long run, I suspect CAD will trade at par, or slightly below.

I've opted to buy US stocks and ETFS when the dollar is at or above par, and then switch to buying CAD currency hedged ETFS that track the same underlying index when dollar drops. Then when/if? (difficult to guess short term) the dollar goes close back to par, sell the C$ etfs and rebuy the USD counterpart. The currency hedging has a small cost, but done in the short term to avoid buying when the dollar trades well below par.

One of my main concerns is a home country bias in my portfolio so buying US companies is important to me. If anyone has other strategies to lower currency risk, please share.
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badcoffee wrote: Most of the discussion centres around short term CAD/USD. Personally I'm more interested in the long term. Short term forex trading seems far too speculative for me.
I've given a view of where the CAD/USD$ pair is going in the long term. Dramatically higher for the CAD$ as the US forced into a devaluation to correct the long-term trade imbalances that exist between it and the rest of the world. And as Canada's consumer debt starts to slow and even contract.

One of my main concerns is a home country bias in my portfolio so buying US companies is important to me. If anyone has other strategies to lower currency risk, please share.
There's a whole world of investing outside of just Canada and the United States. You can buy an Intel, or you can buy a Taiwan Semiconductor Manufacturing Company. Both are undisputed leaders in their industry. The current freak-out in the emerging markets is an excellent opportunity to acquire equity on the cheap.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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New CoT report out today:

Code: Select all

Traders in Financial Futures - Futures Only Positions as of February 4, 2014                
-----------------------------------------------------------------------------------------------------------------------------------------------------------
              Dealer            :           Asset Manager/       :            Leveraged           :              Other             :     Nonreportable    :
           Intermediary         :           Institutional        :              Funds             :           Reportables          :       Positions      :
    Long  :   Short  : Spreading:    Long  :   Short  : Spreading:    Long  :   Short  : Spreading:    Long  :   Short  : Spreading:    Long  :   Short   :
-----------------------------------------------------------------------------------------------------------------------------------------------------------
CANADIAN DOLLAR - CHICAGO MERCANTILE EXCHANGE   (CONTRACTS OF CAD 100,000)                          
CFTC Code #090741                                                    Open Interest is   160,625
Positions
    88,324      1,745        693     14,477     17,085        691     12,844     87,651      4,830     13,458      3,670        214     25,094     44,046
 
Changes from:       January 28, 2014                                 Total Change is:     3,411
     4,758        226       -371      1,644        321       -130        900        968        108        328        543       -421     -3,405      2,167
 
Percent of Open Interest Represented by Each Category of Trader
      55.0        1.1        0.4        9.0       10.6        0.4        8.0       54.6        3.0        8.4        2.3        0.1       15.6       27.4
 
Number of Traders in Each Category                                    Total Traders:        95
        14          4          5          4          8          .         16         33         11         11          5          5
Leveraged speculator sentiment ("dumb money") is starting to turn a little, with a roughly equal number of contracts on the long and short added to the pair. Which is quite in contrast with the increasing bearishness towards the CAD$ that we saw in the past few reports.

Asset manager (aka "smart money") is turning extremely bullish on the CAD$. These are the people who actually use currency, not a bunch of grown men playing speculator games on their computers.

With $100 oil (the highest on this day in history Zerohedge tells me!) and an economy that isn't falling off the cliff despite a significant slowdown in the RE industry, it is no surprise that the speculators are at least starting to realize that the long term value of the CAD$ is considerably higher than currently depressed levels.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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As mentioned in the old thread that got deleted because a certain troll resorted to racist terminology, it was mentioned that you should not rely only on the CoT report to do forex speculation because only the real 'dumb money' does that.
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sunshinemoonlight13 wrote: As mentioned in the old thread that got deleted because a certain troll resorted to racist terminology, it was mentioned that you should not rely only on the CoT report to do forex speculation.
There was no racist terminology in any prior thread, and you're certainly entitled to your belief as to the CoT reports, but clearly it shows that there is a significant amount of bullishness on the part of people who actually use the currency, as opposed to people who just speculate, long or short, in it.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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sunshinemoonlight13 wrote: As mentioned in the old thread that got deleted because a certain troll resorted to racist terminology, it was mentioned that you should not rely only on the CoT report to do forex speculation because only the real 'dumb money' does that.
I cannot believe that the mods don't ban people that often spread racist remarks. In fact, I remember this same troll (you mentioned) giving out extremely damaging opinions to people on this forum who are simply out for some help. A few things I remember:

1) telling users to change motor oil in their car ever 5 year
2) telling a user to apply for a 25 year TERM mortgage (man that is stupid)
3) every stock buying advice
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Anikiri wrote: I cannot believe that the mods don't ban people that often spread racist remarks.
Who did that? Not me. I used the very same term used by a number of the intellectual and social leaders associated with that race, to describe themselves. In fact, various sources on the Internet tell me that another term, used by some others, that is the name of a colour (or lack thereof) is actually very derogatory. As is referring to people from a certain continent or a certain country to which they or their ancestors may have never inhabited.
1) telling users to change motor oil in their car ever 5 year
In the context of a used oil analysis program and/or historical experience with a particular engine/oil combination.
2) telling a user to apply for a 25 year TERM mortgage (man that is stupid)
Simply not true. I told the user to use the 25-year term mortgage rate "in the math" of calculating long-term viability for a property investment. I did not provide any specific financing advice.
3) every stock buying advice
I have never advised anyone to purchase a security, but have pointed out certain positive and negative aspects of some investments and corrected a bunch of complete misinformation offered up.

So let's see, you're basically 0 for 4 in your attempt to troll and ruin this thread. As in American football, you lose.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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I found a way to offset the high USD rate. I called my ISP and told them I wanna cancel and the gave me a $20 monthly discount. That's $240 per year. That means I can now buy 2000 USD. Guess what, I'll do the same with all my monthly bills :)

Hey Poloz, I'm not gonna stop cross-border shopping! I'm planning to send you a Postcard on my next trip :)

Actually, let's all do that. Send Postcards to BoC address with a Note "Enjoying Cross-Border Shopping to the Limit"
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^^^ great, your thrift is great, but I'm not quite sure what that has to do with the CAD/USD discussion.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Interesting article about Forex speculation. Not to say that any of it applies to the CAD/USD pair, but its certainly an area of heavy activity for speculators:

http://www.zerohedge.com/news/2014-02-0 ... -uncovered
Behind the scenes, though, banks often buy or sell currencies aggressively to prevent those levels from being breached, according to traders and banking executives. That may be to the detriment of clients, who would otherwise potentially receive a payment, these industry officials say, although banks see it as a way to protect their cash. Such tactics are commonplace, traders say.
Certainly would explain why the CAD/USD pair has been, at least temporarily, moved beyond anything of a semblance of a relationship to fundamentals.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mark77 wrote: ^^^ great, your thrift is great, but I'm not quite sure what that has to do with the CAD/USD discussion.
Well, wasn't it the wink-wink policy of Poloz that brought the CAD down? Wouldn't we all wanna thank him for that? A Postcard would be a perfect token...
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The Dollar went up today. Mrs Yellen made some nice comments.

I guess we need one more bad US unemployment report and one good Canadian report and maybe the CAD would reach 95 cents?
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Yeah I'd definitely caution about thinking of more extreme moves either way, but the talk of it going to 80 cents has largely been extinguished. With WTI at $100/barrel, gold starting to ramp up, the budget pretty much balanced, government austerity at least postulated, and debt expansion being attenuated, the reaction downwards has probably been overblown.

Event-wise, probably watch the BoC at the next announcement. CoT reports will tell you how much bullish or bearish sentiment there was, and last week there was quite a resounding vote of confidence from the "commercials", ie: people who actually buy or sell CAD$ in support of commerce. As opposed to the hugely bearish leveraged speculators who more often than not are wrong (so-called "dumb money").
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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New Commitment of Traders Report:

Code: Select all

Traders in Financial Futures - Futures Only Positions as of February 11, 2014               
-----------------------------------------------------------------------------------------------------------------------------------------------------------
              Dealer            :           Asset Manager/       :            Leveraged           :              Other             :     Nonreportable    :
           Intermediary         :           Institutional        :              Funds             :           Reportables          :       Positions      :
    Long  :   Short  : Spreading:    Long  :   Short  : Spreading:    Long  :   Short  : Spreading:    Long  :   Short  : Spreading:    Long  :   Short   :
-----------------------------------------------------------------------------------------------------------------------------------------------------------
CANADIAN DOLLAR - CHICAGO MERCANTILE EXCHANGE   (CONTRACTS OF CAD 100,000)                          
CFTC Code #090741                                                    Open Interest is   157,495
Positions
    84,402      2,329      1,335     14,430     16,629        690     10,623     85,926      5,355     14,876      4,742        165     25,619     40,324
 
Changes from:       February 4, 2014                                 Total Change is:    -3,130
    -3,922        584        642        -47       -456         -1     -2,221     -1,725        525      1,418      1,072        -49        525     -3,722
 
Percent of Open Interest Represented by Each Category of Trader
      53.6        1.5        0.8        9.2       10.6        0.4        6.7       54.6        3.4        9.4        3.0        0.1       16.3       25.6
 
Number of Traders in Each Category                                    Total Traders:        93
        13          4          6          4          7          .         17         32         13         11          5          4
Ratio of shorts to longs in the leveraged speculator category continues to increase. But big short covering in the "nonreportables". Despite the CAD$ actually doing fairly well over the past week or two. Other than that, not a lot of change. Could be setting up for a fairly violent break-out.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Oct 2, 2013
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This dollar is causing major issues with businesses that purchase items from the U.S. Costs have increased 10-12% easily. While this may be good for Canadians that pay things in USD, it forces businesses such as ours to raise our prices, effectively costing Canadians more.

I have heard predictions of 1.30CAD/1USD in the next two years. Very scary!
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orthognathic wrote: This dollar is causing major issues with businesses that purchase items from the U.S. Costs have increased 10-12% easily.
But hasn't the weak US economy depressed those costs?
While this may be good for Canadians that pay things in USD, it forces businesses such as ours to raise our prices, effectively costing Canadians more.
What sort of business are you in?
I have heard predictions of 1.30CAD/1USD in the next two years. Very scary!
People tend to exaggerate a lot. With $100 oil, gold on the upwards trajectory, and debt deflation in the RE market ahead of us, that's an incredibly unlikely proposition.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...

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