I'm currently long AUDUSD, target .9500. Won't touch USDCAD until some negative economic data start coming in and there's a sustained drop in oil prices - I figure that won't happen till we get to .90. maybe even .85. AUD is resource-based, like CAD, but is much more interest-rate driven - the Aussies just put their rates up .25 while the Fed went down .25 and may repeat in December. AUD is also pushed up by the AUDJPY carry trade, which still has a lot of headroom. I.e. I see the AUDUSD climb as broader-based and more reliable than whatever the hell USDCAD is doing. About the time AUDUSD hits .9500 (I may climb off somewhere north of .94), I figure USDJPY will be hitting around 111 & change, time for a small revival of the USDJPY carry trade, maybe back up to 113 or so?
Oil prices have been dropping. Some Saudi bigwig said he thought oil should be at $60-70, and M&A having dried up there is really nothing holding the loonie up any more. I think what we've seen lately is momentum + speculative overreaction to the subprime mess and the Fed inching rates down. I'm betting we'll end the year at par or better.