Nothing ridiculous about EUR/CAD move. A number of people were making the call back in the summer. The market just took a while to stop thinking 'CAD is strong' and just look at the data and at what the central bankers are saying. That said, "nothing moves in a straight line", so a correction is somewhere not too far.
Well, I think it's ridiculous (and since that's an opinional distinction, I guess we'll just have to agree to disagree). Regardless, I just shorted at 1.5140 with a tight tight stop. It's not absurd that there's a move up. I don't consider it absurd that the move up was even that much. What is rather absurd is the massive move up in such a short time frame without corrections. That's where it gets me.
I think the speed of EUR/CAD was really dictated by EUR/USD, USD/CAD is essentially still stuck in a range.
Although I think the loonie will play some catch up vs the dollar, I tend to agree, you're only going to really profit if the euro itself falls. Any further weakness in us dollar will just make it worse for eur/cad shorts. That begs the question, why not just short the euro then? Or go long canadian by itself?
Re Misha: That certainly has something to do with it. But the fact that all majors have strengthened to the USD except the CAD, and the amount the EUR has appreciated against the USD in comparison with the CAD in the same amount of time is what is getting my goat. Re Illiquid: At this point, the better bet considering the strength of the upmove is to fade the EUR/CAD (I think). Were we to have the right answer, this would never be any fun, no?
CAD has turned out to be one big distraction this entire week, considering what is going on with the dollar. Is Quebec seceding or what?
Who cares? The belief that's sacking CAD is that the BoC will be cutting as well early 06. Also a ridiculous viewpoint, in my opinion. I think what is happening is you're seeing an exit of all that money that propped CAD up all year on oil because of repatriation back into various currencies at year end. As of the new year, I expect CAD to be a player again. Of course at current rates of trajectory, EUR/CAD will be somewhere around 2.30 by then!