Forex Investment and Currency Trading

Canadian Dollar
The CAD has a data-free week (or little more) ahead of it, with no major domestic economic reports due until building permits on July 7th and no major speeches scheduled. Left to its own devices, it remains to be seen whether the CAD can recover some of its recent relative under performance. Analysts remain bullish on the CAD versus the USD from a longer term point of view given Canada’s stronger structural position relative to the US, sounder financial system and lack of credit/quantitative easing policies and feel that global investors who are seeking a safe, hard currency alternative [...]

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Brent crude prices are moving higher with the recent activity showing accelerated gains. The May contract is finally showing a turn higher in the moving averages, as the 20-day moving average is rising at USD 46.26/bbl, while the 60-day moving average is now at USD 45.18/bbl. From a charting perspective, the move above the USD 52.20/bbl resistance area (USD 52.21/bbl was the Jan. 06 high on the continuation chart) helps to confirm the breakout higher, with the USD 56/bbl level kept as the near term target. Some support is layered from USD 52.20/bbl to USD 50/bbl, but more significant chart [...]

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“The Dangers of Turning Inward” (WSJ, February 28th-March 1st, 2009)
“Argentina Raps U.S. Over Critical Words” (WSJ, February 28th-March 1st, 2009)
“Sharif Warns That Unrest May Embolden Islamists” (WSJ, February 28th-March 1st, 2009)
“Playing With Fire In Pakistan: (NYT, February 28th, 2009)
“U.S. and China Will Revive Military Talks” (NYT, February 29th, 2009)
“Mexico: U.S. senate to Examine Violence Near Border” (WSJ, February 27th, 2009)
“Tensions Rise in Fragile Bosnia as Country’s Serbs Threaten to Seek Independence” (NYT, February 27th, 2009)
“France Wants Market Protection” (Investors Business Daily, February 25th, 2009)
“Iran Tests Nuclear Plant, In Venture With Russia” (WSJ, February 26th, 2009)
“Russia Girds For Deficit, High Inflation” [...]

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Gold prices have rallied 40% from late October lows. Traditionally, gold is thought of as a hedge against inflation. The spectacular rise in gold prices during the inflationary 1970s cemented conventional wisdom about the strong positive link between rising inflation and gold prices. Can this explain the substantial rise in gold prices over the past four months? Expected inflation (as measured by the spread between the yield on US 10 year Treasuries and 10-year TIPS) has risen by over 200bp since late November and over a 100bp since late October. So there is a case to believe that gold has [...]

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