{"id":33818,"date":"2016-04-17T16:20:06","date_gmt":"2016-04-17T23:20:06","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=33818"},"modified":"2016-04-17T16:20:06","modified_gmt":"2016-04-17T23:20:06","slug":"the-canadian-dollar-rides-stronger-economic-signals-can-the-momentum-sustain","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2016\/04\/17\/the-canadian-dollar-rides-stronger-economic-signals-can-the-momentum-sustain\/","title":{"rendered":"The Canadian Dollar Rides Stronger Economic Signals &#8211; Can the Momentum Sustain?"},"content":{"rendered":"<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on April 5, 2016. <a href=\"http:\/\/seekingalpha.com\/article\/3963235-canadian-dollar-rides-stronger-economic-signals-can-momentum-sustain\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n<p><a href=\"http:\/\/www.statcan.gc.ca\/daily-quotidien\/160331\/dq160331a-eng.htm?HPA\" target=\"_blank\">Canada&#8217;s GDP report for January, 2016<\/a> confirmed renewed strength in the Canadian economy. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_33822\" aria-describedby=\"caption-attachment-33822\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_CanadaGDPContributions.png\" rel=\"attachment wp-att-33822\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_CanadaGDPContributions.png\" alt=\"Export-dependent manufacturing was a stand-out performer in January\" width=\"550\" height=\"393\" class=\"size-full wp-image-33822\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_CanadaGDPContributions.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_CanadaGDPContributions-300x214.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-33822\" class=\"wp-caption-text\">Export-dependent manufacturing was a stand-out performer in January<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"http:\/\/www.statcan.gc.ca\/daily-quotidien\/160331\/cg-a003-eng.htm\" target=\"_blank\">Statistics Canada<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Now that the Canadian economy has apparently stabilized, the weakening in the Canadian dollar has come to a dramatic end. I argued last month that &#8220;<a href=\"http:\/\/seekingalpha.com\/article\/3957264-bank-canada-done-rate-cuts\" target=\"_blank\">the Bank Of Canada is done with rate cuts<\/a>.&#8221; The rapid reflation of the Canadian dollar (FXC) coupled with Canada&#8217;s improving economic performance seem to confirm that the Bank of Canada is running out of excuses for outright dovishness&#8230;except of course to try to encourage traders to get back to shorting the currency. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_33826\" aria-describedby=\"caption-attachment-33826\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_FXC.png\" rel=\"attachment wp-att-33826\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_FXC.png\" alt=\"CurrencyShares Canadian Dollar ETF (FXC) has surged in 2016 in rapid fashion of its multi-year lows.\" width=\"550\" height=\"375\" class=\"size-full wp-image-33826\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_FXC.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_FXC-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-33826\" class=\"wp-caption-text\">CurrencyShares Canadian Dollar ETF (FXC) has surged in 2016 in rapid fashion of its multi-year lows.<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"http:\/\/www.freestockcharts.com\/platform\/v1\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_33824\" aria-describedby=\"caption-attachment-33824\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_cot-USD_CAD.png\" rel=\"attachment wp-att-33824\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_cot-USD_CAD.png\" alt=\"Speculators have beat  steady retreat from short positions against the Canadian dollar.\" width=\"550\" height=\"550\" class=\"size-full wp-image-33824\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_cot-USD_CAD.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_cot-USD_CAD-150x150.png 150w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_cot-USD_CAD-300x300.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-33824\" class=\"wp-caption-text\">Speculators have beat  steady retreat from short positions against the Canadian dollar.<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"https:\/\/www.oanda.com\/forex-trading\/analysis\/commitments-of-traders\" target=\"_blank\">Oanda&#8217;s CFTC&#8217;s Commitments of Traders<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Oil is of course a big part of the story for Canada. This part of the economy has been humming even as oil groped its way to January&#8217;s bottom. The month of January lodged a fourth straight month of solid overall performance. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_33819\" aria-describedby=\"caption-attachment-33819\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_Oil_BrentVsWTI.png\" rel=\"attachment wp-att-33819\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_Oil_BrentVsWTI.png\" alt=\"Oil prices through 3\/28 - the Canadian dollar&#039;s weakness ended with the first bottom in January\" width=\"550\" height=\"365\" class=\"size-full wp-image-33819\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_Oil_BrentVsWTI.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_Oil_BrentVsWTI-300x199.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-33819\" class=\"wp-caption-text\">Oil prices through 3\/28 &#8211; the Canadian dollar&#8217;s weakness ended with the first bottom in January<\/figcaption><\/figure><br \/>\n<strong>Source: US. Energy Information Administration, Crude Oil Prices: West Texas Intermediate (WTI) &#8211; Cushing, Oklahoma [DCOILWTICO], <a href=\"https:\/\/research.stlouisfed.org\/fred2\/series\/DCOILWTICO\" target=\"_blank\">retrieved from FRED, Federal Reserve Bank of St. Louis<\/a>, April 4, 2016.<br \/>\nUS. Energy Information Administration, Crude Oil Prices: Brent &#8211; Europe [DCOILBRENTEU], <a href=\"https:\/\/research.stlouisfed.org\/fred2\/series\/DCOILBRENTEU\" target=\"_blank\">retrieved from FRED, Federal Reserve Bank of St. Louis<\/a>, April 4, 2016.<\/strong><br \/>\n<\/center><\/p>\n<p>The above chart has data through March 28th. SINCE then, oil has continued a decline off its recent peak. The weakness has been pronounced enough to drive the United States Oil fund (USO) through its support level at its 50DMA.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_33820\" aria-describedby=\"caption-attachment-33820\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_USO.png\" rel=\"attachment wp-att-33820\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_USO.png\" alt=\"The United States Oil fund (USO) cracked support aat its 50-day moving average (DMA). This move puts the double-bottom in play.\" width=\"550\" height=\"375\" class=\"size-full wp-image-33820\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_USO.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/04\/160404_USO-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-33820\" class=\"wp-caption-text\">The United States Oil fund (USO) cracked support aat its 50-day moving average (DMA). This move puts the double-bottom in play.<\/figcaption><\/figure><br \/>\n<strong>Source: <a href=\"http:\/\/www.freestockcharts.com\/platform\/v1\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>The consistent decline in oil off its recent peak brings darkening clouds over the Canadian dollar&#8217;s strength. {snip}<\/p>\n<p>Be careful out there!<\/p>\n<p>Full disclosure: long FXC, short USD\/CAD<\/p>\n<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on April 5, 2016. <a href=\"http:\/\/seekingalpha.com\/article\/3963235-canadian-dollar-rides-stronger-economic-signals-can-momentum-sustain\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This is an excerpt from an article I originally published on Seeking Alpha on April 5, 2016. Click here to read the entire piece.) Canada&#8217;s GDP report for January, 2016 confirmed renewed strength in the Canadian economy. {snip} Source: Statistics Canada Now that the Canadian economy has apparently stabilized, the weakening in the Canadian dollar &#8230; <a title=\"The Canadian Dollar Rides Stronger Economic Signals &#8211; Can the Momentum Sustain?\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2016\/04\/17\/the-canadian-dollar-rides-stronger-economic-signals-can-the-momentum-sustain\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[235,59,20],"tags":[296,1688,297,247,536,469,538],"class_list":["post-33818","post","type-post","status-publish","format-standard","hentry","category-canada","category-economy","category-forex","tag-canadian-dollar","tag-cftc","tag-fxc","tag-gdp","tag-oil-2","tag-usdcad","tag-uso"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Canadian Dollar Rides Stronger Economic Signals - Can the Momentum Sustain? - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2016\/04\/17\/the-canadian-dollar-rides-stronger-economic-signals-can-the-momentum-sustain\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Canadian Dollar Rides Stronger Economic Signals - Can the Momentum Sustain? - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(This is an excerpt from an article I originally published on Seeking Alpha on April 5, 2016. 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Click here to read the entire piece.) Canada&#8217;s GDP report for January, 2016 confirmed renewed strength in the Canadian economy. {snip} Source: Statistics Canada Now that the Canadian economy has apparently stabilized, the weakening in the Canadian dollar ... 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