[FoxV]

I've been watching the exchange rates of some of the major currencies for a while now, and for the most part when compared to the USD, the Canadian dollar would go up or down (but mostly up btw) along with the major currencies (Pound, Euro, Yen, AUD).

The only time it would deviate signficantly from the majors is when there was a large swing in oil/gold (and commodities in general). However in these cases, the CND would pretty much follow the AUD as it is also a commodities based country.

This was the predictable pattern up until last week. Now not only is the CND not following the majors, it is actually going down against the US (which means we are taking a double whammy against the majors). And during the last week Gold and Oil are going up (again a double whammy for us Canucks).

Very worring stuff, because I was hoping for some stability on this side of the boarder when TSHTF (which appears to be happing now btw)

[Kingcoal]

Canada and the US are each other's biggest trading partners, maybe that has something to do with it.

[Dreamtwister]

I have family living near the border. I've noticed a change in travel patterns heading into the states, just from casual observations.

In July, there was a transport truck heading to the border crosssing every ~3 cars. In October, that rate dropped to 1 every ~12 cars.

Canada's resources (except oil) and manufactured goods aren't crossing the border any more. Inventories are building up.

That, and the BoC's refusal to raise interest rates is discouraging investers.

[EnergyHog]

One possible explanation is that Canada is trying to increase exports to other countries. Devaluing the looney is like putting everything on sale, for those of us outside of Canada.

[threadbear]

$this->bbcode_second_pass_quote('FoxV', 'I')'ve been watching the exchange rates of some of the major currencies for a while now, and for the most part when compared to the USD, the Canadian dollar would go up or down (but mostly up btw) along with the major currencies (Pound, Euro, Yen, AUD).

The only time it would deviate signficantly from the majors is when there was a large swing in oil/gold (and commodities in general). However in these cases, the CND would pretty much follow the AUD as it is also a commodities based country.

This was the predictable pattern up until last week. Now not only is the CND not following the majors, it is actually going down against the US (which means we are taking a double whammy against the majors). And during the last week Gold and Oil are going up (again a double whammy for us Canucks).

Very worring stuff, because I was hoping for some stability on this side of the boarder when TSHTF (which appears to be happing now btw)

[FoxV]

hmm, I haven't heard anything about rate changes recently. Has somebody raised them. I was under the assumption that everyone was holding them steady as not to send the USD into a free fall (although nothing may stop that)

as for the US sucking up 85% of our exports, a USD fall will hurt us as well no doubt. I just always assumed that would mean we would fall at worst in parallel.

Although as far as my graphs can track (7 years on the yahoo scuttlebutt widget) the Canadian dollar has pretty much consistantly outperformed the majors, so perhaps its just finding its support point during this shake up.

does anybody have any Real articles about what is currently happening in Canada. All I can find is MSM crap about how great everything is (with lots of emphisis on Canada's new found national housing boom )

[NEOPO]

currencies are traded much like commodities such as oil

So I want to tell ya that its a free market etc etc and that currencies can go up and down kinda naturally yet of course there are forces pushing and shoving in both directions that creates the market in the first place.

Heres a few charts that show the dollar versus other currencies:
dollar versus euro 5 year chart

dollar versus pound 5 year chart

dollar versus loon or canadian dollar 5 year chart

Seems it has been america who has been on "sale" over the last several years.
Right around the same time oil took off hmmmmmm

[FoxV]

$this->bbcode_second_pass_quote('FoxV', 'h')mm, I haven't heard anything about rate changes recently. Has somebody raised them.

[EnergyHog]

$this->bbcode_second_pass_quote('FoxV', 'h')mm, I haven't heard anything about rate changes recently. Has somebody raised them. I was under the assumption that everyone was holding them steady as not to send the USD into a free fall (although nothing may stop that)

as for the US sucking up 85% of our exports, a USD fall will hurt us as well no doubt. I just always assumed that would mean we would fall at worst in parallel.

Although as far as my graphs can track (7 years on the yahoo scuttlebutt widget) the Canadian dollar has pretty much consistantly outperformed the majors, so perhaps its just finding its support point during this shake up.

does anybody have any Real articles about what is currently happening in Canada. All I can find is MSM crap about how great everything is (with lots of emphisis on Canada's new found national housing boom )

[threadbear]

Jim willie is the best. Very well reasoned points of view and not afraid to write colorfully. Really like him. Peak economy.com.--I'm on my way over!

[FoxV]

$this->bbcode_second_pass_quote('EnergyHog', 'C')heck out Jim Willie CB, he's at GoldenJackass.com and writes free articles on 321gold.com (I've got links to them on my PeakEconomy.com website)

[FoxV]

well I certainly don't disagree with you there Elijah'. Being tied to American's hip has certainly given us a lot of perks. But it also carries a considerable down side.

There is a lesson in nature to consider here. A coyote and a badger will often team up in the wild. The badger will flush the rabbit out of its hole and the coyote will catch it and then share it with the badger. A beneficial arrangement for both with an added bonus for the coyote. When times are tough and no rabbits can be found, the coyote can eat the badger.

but as we aren't there yet, here's a more analytical reason for the CND$'s current drop (which lost another half penny today )
WHAT'S UP (RATHER DOWN) WITH THE CANADIAN DOLLAR?

[MrBill]

Couple of reference points as I cannot post graphs.

USD/CAD
Last C$1.1459
High C$1.6070 on 01/25/02+
Ave C$1.3286
Low C$1.1014 on 06/02/06*

EUR/USD
Last $1.3291
High $1.3604 on 12/31/04 ()
Ave $1.1594
Low $0.8622 on 02/01/02+

EUR/CAD
Last C$1.5233
High C$1.6866 on 02/13/04 ()
Ave C$1.5219
Low C$ 1.3571 on 03/03/06*

*strong C$ corresponds with crude oil trading at or near of high of $78.40

+strong USD corresponds to roughly around the time that the EUR stopped losing value against the dollar after the issue of notes and coins approximately one year earlier in JAN 01

() strongest point for the EUR against both the USD and the CAD in 2004, but months apart? Likely because the FED started raising interest rates in APR 2004. While CDA was pretty much the commodity story.

source: bloomberg
12/08/01 - 12/08/06
month/day/year US convention

Comments:

The CAD will sometimes trade on its own based on commodity prices like the AUD story. And sometimes it will trade against the USD as CDA's largest trading partner. Interest rate differentials and rates of growth between CDA and the USA will also provide hints as to the direction of the USD/CAD.

At the moment, I think the CAD is taking a bit of hit as commodity prices come off their highs, just as changes to CDN income trust tax rules have knocked CDN stock markets, especially energy income trusts.

Also, a strong CAD by recent historical standards near C$1.1014 on 06/02/06 is certainly hurting CDN exports to the USA as the US economy cools. This especially hits CDN auto exports from central CDA. But also BC exports of lumber naturally.

I think most of the CAD weakness recently has actually been EUR strength against the USD as the EURJPY and EURCNY are also at record prices, and USD weakness mean that the GBP is also stronger, but not overly against the EUR.

At C$1.5230 against the EUR the CAD is at its 5-year ave of C$1.5220. Good news for anyone looking to cash out gains in Europe and buy property in CDA! ; - )


UPDATE:
$this->bbcode_second_pass_quote('', 'F')lagging exports, renewed expectations for higher interest rates abroad and a Bank of Canada warning that the economy won't be as strong as expected, compounded a decline that began in the summer as oil prices slid from record highs.

In the past three months, the loonie has fallen against every major currency — and is the sole loser against the U.S. dollar — as oil prices retreated and a government decision to halt income trust conversions sapped demand for the currency among foreign investors.

In May, investors were starry-eyed for Canada and its currency as commodity prices soared, prompting a wave of mergers and acquisitions. But that was then, and Rebecca Patterson, global currency strategist at JPMorgan Chase & Co. in New York, reckons the currency is now reflecting a new economic reality.

[MOCKBA]

$this->bbcode_second_pass_quote('MrBill', '
')At C$1.5230 against the EUR the CAD is at its 5-year ave of C$1.5220. Good news for anyone looking to cash out gains in Europe and buy property in CDA! ; - )

[Dreamtwister]

$this->bbcode_second_pass_quote('MOCKBA', 'H')ow much CAD would be worth when Quebec would keep on separating I cannot speculate, but my guess is it should be less then when they don't show that often blue on TV and show more of red instead.

[threadbear]

The American would like nothing better than subdivide their backyard into four parts--Alberta, BC, and perhaps Saskatchewan would be one state. Manitoba, Ontario, another separate state. Quebec would get sovereignity and Labrador, and then, of course the Maritimes would have to split off--So long and thanks for the fish.

Then Americans would have unimpeded access and power over energy and mineral wealth in Western Canada.

[MOCKBA]

$this->bbcode_second_pass_quote('Dreamtwister', 'H')onestly though, I see Alberta gaining independance before Quebec does.

[Dreamtwister]

$this->bbcode_second_pass_quote('threadbear', 'T')hen Americans would have unimpeded access and power over energy and mineral wealth in Western Canada.