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Central Bankers Love the Aussie Dollar and Canadian Loonie

Posted Jun 22nd 2010 4:40PM by Connie Madon (RSS feed)
Filed under: International Markets, Insiders, Market Matters, Economic Data, Currency

In an ever changing world, central bankers are reevaluating which currencies to add to their sovereign reserves. Central bankers, by the very nature of their positions, must take every precaution when investing their country's sovereign reserves.

Looking around we see Europe in a mess. Greece is being bailed out by its other eurozone partners. As a consequence, its borrowing costs have doubled to 9.4%. Yields on Portuguese debt stands at 6.3%, the highest since the euro started in 1999. Last month the EU announced a 750 billion euro rescue mechanism to stabilize the market. The euro hit a four year low of $1.1877 on June 7. As a sitting central banker, would you go there? Probably not.

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Guru Strategy: Americans should turn to Canada for outsized returns

Posted Jun 23rd 2009 3:50PM by Nikhil Hutheesing (RSS feed)

Canadian stocks are set to give American investors a twofer. As stocks go up, Gordon Pape, one of Canada's leading experts on mutual funds and the editor of The Canada Report, says that Americans get stock appreciation and a currency bonus – making investing in Canadian stocks more profitable than U.S. stocks.
And now, says Pape, is an especially good time to invest since stocks and the Canadian dollar have recently taken a breather.

We caught up with Gordon Pape to talk to him about earning market profits plus a currency bonus.

Continue reading Guru Strategy: Americans should turn to Canada for outsized returns

Loonie at par with dollar: What's a Canadian to do? Buy in the States

Posted Sep 21st 2007 12:52PM by Melly Alazraki (RSS feed)
Filed under: Market Matters, Canada, Economic Data

Believe it or not, but "cheers erupted on the foreign exchange desk at Scotia Capital" yesterday when the loonie (that's what us Canadians call our dollar) first traded at parity with the U.S. dollar -- for the first time in 31 years. I'm sure the scene was similar in other banks across Canada. As is almost usual, though, the Americans beat us to it as they are the ones who actually did the trade, specifically Citigroup's New York currency desk. Oh, well.

The Canadian dollar hit its historic low of 61.79 cents (U.S.) on Jan. 21, 2002, but has gained more than 16% this year and almost 8% since mid-August alone. The True North is indeed strong. But is this good for Canada? For the U.S.? Canadian exporters are no doubt suffering, American ones will be doing better following the fall of the U.S. dollar. Tourism will likely improve in the U.S., but suffer in Canada. And consumers? Canadian consumers aren't happy, but I'm sure U.S. outlet malls along the Canadian border are quite happy. It used to be the other way around.

Continue reading Loonie at par with dollar: What's a Canadian to do? Buy in the States