Fresh Hopes for the Canadian Dollar As Central Bank Talks Recovery

The Canadian Dollar After the Canadian dollar (USD/CAD) sold off in the wake of the Bank of Canada’s latest Monetary Policy Report (MPR), I doubled down on my bullish bet on the currency (short USD/CAD). That bet paid off as general weakness in the U.S. dollar took USD/CAD back down to its 50-day moving average … Read more

From Shocks to Trade War Damage, the Bank of Canada Changes Its Tune

The Bank of Canada changed its tune from the its last pronouncement on monetary policy. At that time, the Bank was very confident about the Canadian economy even as it mapped out the downside risks of the U.S. vs China Trade War. The Trade War remains unresolved three months later, and the Bank of Canada … Read more

Canadian Dollar Benefits from Economic Rebound But Has Significant Risk

The U.S. dollar versus the Canadian dollar (USD/CAD) closed the week at a 9-month low.

“It would be a difficult place for policy, and my sense is that the markets are not really onto the complexity of it. It seems a little too easy that ‘Oh. Interest rates could decline and that will make everything OK.’ That may be true for the small kind of shocks that we’ve had so … Read more

The Canadian Dollar Pushes Past A Dovish Bank of Canada

The Bank of Canada released its latest pronouncement on monetary policy on the heels of a rapid rally for the Canadian dollar (FXC). USD/CAD was down 5 straight days going into the release of the January, 2019 Monetary Policy Report. Four of five of those days delivered substantial declines. The Bank provided a truncated summary … Read more

Canadian Dollar Weakens Further Despite Earlier Policy Warnings

Central banks are getting pretty good at having it both ways. Despite two rate hikes, one in July and one in September, the Bank of Canada (BoC) has talked its way to a net no change in the Canadian dollar (FXC) versus the U.S. dollar (DXY0). Source: As the chart above shows, the Canadian … Read more

How to Reconcile Brexit Uncertainties and the Rally in Stock Markets: Don’t

“Faint and quaint” is how I am starting to describe the initial panic and consternation of financial markets resulting from the UK’s decision to exit from the European Union (EU), aka Brexit. The S&P 500 (SPY) now logs new all-time highs as if nothing ever happened. Yet, a rapid consensus has grown around reducing forecasts … Read more