Forex Investment and Currency Trading

A healthy concoction of factors is driving the CAD sharply higher as we approach month end; there may be some suspicion that month/quarter end flows are at play (with many back-of-the-envelop estimates suggesting portfolio managers on the whole will be USD-sellers today to rebalance hedges) but better risk appetite, firmer equities and stronger commodities are all playing into the firmer CAD tone this morning. News that US lawmakers are working on a deal to exempt Canada from the “buy America” provision of the US stimulus package may have added to CAD support at the margin. Add to all that the [...]

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USD: For USD, the outlook continues to be for a bit more depreciation in the near term, and then appreciation through 2010 against most of G10. In general there should be no substantial pullback in risk appetite over the remainder of the year, and the correlation between positive risk and a weaker USD will continue to hold at the same time.
EUR: The near-term outlook for EUR is for a bit more appreciation for the rest of the year. The relationship between positive risk sentiment and gains in EUR has really been a force, one that is unlikely to shift in [...]

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Dallas Fed Fisher: Policy reversal could be swift “When it comes time to tighten monetary policy, my colleagues and I will move with an alacrity that, if needed, will be equal in speed and intensity to that with which we pursued monetary accommodation,” Fisher said in remarks prepared for a speech to the Texas Christian University Business Network of Dallas. For now, Fisher expressed “cautious optimism” about the economy in general and the housing market in particular. There is some concern that the hope for a housing rebound could succumb to the headwinds experienced earlier if the efforts of fiscal [...]

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After struggling under the weight of the intense global economic recession and financial crisis, the Canadian economy appears to be well and truly on its way to recovery – albeit one initially driven by the significant monetary and fiscal stimulus added to the system. In July, market expects the Canadian economy to post its second monthly GDP gain in a year with a respectable 0.4% M/M advance, following the 0.1% M.M gain the month before. The key factor driving economic activity higher in July should be strong manufacturing sector production, which boasted its biggest monthly performance (in real terms) in [...]

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