"Of note is the increasingly negative impact that the strong CAD is having on the economy. Domtar announced this week that it was closing some of its plants, blaming the high currency, and today, Shermag announced it is closing a Quebec factory. Cascades Inc closed its mill in Thunder Bay with job cuts also slated in coming months at GM Canada, Westcast Industries, ATS Automation Tooling Systems and Imperial Tobacco Canada, according to the Canadian press."
Well, on the other fundamental side: [CANADA NOV EMPLOYMENT] rose 30.6K with full time jobs up 50.2K and part-time jobs down 19.6K. This was stronger than the consensus estimate of a 17K gain. The unemployment rate fell to 6.4% from 6.6% when an unchanged 6.6% had been expected. This is the lowest rate since at least 1976. [MORE ON CANADA JOBS] The data were strong and guarantee a BOC rate hike next Tue, so it is not surprising that bonds have fallen sharply...
Yep, good employment data. But search around a bit to see what effect the CAD being at multiyear highs against every conceivable currency is doing to the CAD economy. The US job report was nice as well. The move down in CAD, I suspect, had more to do with removing Asian DNTs 16-20 than it did with any fundamental reasoning I could care less, though. Better buying prices for me.
Seriously though - The Canadian economy is solid and is quickly becoming a Capitalist Saudi Arabia thanks to all the oil and other natural resources. The fact that the dollar is pushing 14-year highs even as the government falls makes it risky to bet against.
Canada / Saudi Please we are far to passive for this comparison BUT it would be nice if the mean houshold income in Canada where to match Saudi's 200k.
No government collapse here trust me, it's only a early election that was immenent from the first day our minority Liberal government took power. This election will only make Canada stronger but be warned if the NDP (our third party) takes a stronger percentage it will be Bearish on the Loonie.
The average Saudi's household income might be 200k. But the wealth is in the hands of very few households, most Saudi's live in poverty.
Heh...ok. This move is less related to the strength of the Canadian economy than it is to fufilling a technical requirement. The US economy isn't exactly a pushover, you know. Do you have any idea what a massively strong loonie against the world's currencies will do to Canada's export market? The market - like it does every time it gets the chance - LOVES to push things into extreme levels just to see how much it can. It's irrational, and it's based soley on greed. This shouldn't be suprising. Look at Gold. But it never holds. And it's great to fade against. My positions are now @.1645 and .1606. All the market has to do is go back to .1740ish for me to think about closing. So let me ask you, which do you think is more likely? A return to .1700s or a push and maintaining below 1600 for...well, a long long time? Feel free to take your time on that.
But you have to wait too long untill this effect will make serious damage to Canadian economy. Is this the main reason for buying cad? Oil prices will grew very soon making CAD more attractive investment. Also interest rates are far to neutral levels so there will be more hikes.