Saturday, January 23, 2016

Canadian Dollar Update As At January 23, 2016

What Is Happening With The Canadian Dollar?



The Canadian Dollar has had a nice bounce up in the past couple days and for sure people want that to continue.

Prices for food are skyrocketing and there is little relief in sight as most produce and vegetables are imported at this time of year.

The Loonie has been buoyed by a rise in the price of oil and a bit of weakness in the US Dollar.

Currency wars have been active quietly for many months. As China attempts to rescue its economy and increase production, there have been manipulations of the Yuan.

In addition many other countries are attempting to use interest rates as a tool to stimulate their economies.

Resources world wide are suffering from lack of deman as the worldwide economic slowdown persists.

Some interesting things have been developing in countries against which the Loonie trades, the next couple weeks will be interesting to determine the direction of the Loonie.

The Canadian Dollar is a component of the US Dollar Index, naturally the Loonie is reflected in that index and that index affects the value of the Loonie.

It looks like there is some divergence on these charts of the USDX and it appears to meet pretty stiff resistance to going much higher, which leads me to believe that the US Dollar is about to fall back which will improve the value of the loonie.

Because there are so many economies involved and because each can change their interest rates without warning, it is very difficult to manipulate the value of the Loonie with interest rates alone.

Three Charts to look at:

We have a weekly chart and a daily chart of the US Dollar index.

Both of these charts show some bearish divergence which is good news for the Loonie.



This next chart shows a pretty strong indication that the Loonie is about to rise

This is a Monthly Chart of the USDCAD currency pair and pretty [plain on there is the bearish pattern.
What makes this pattern more valid than most is that it covers a period of many years, about 15 years.


Long term, the US Dollar will be falling against the Loonie and relief for Canadians.

In the short term, there will be some volatility and we may see the gains of this week wiped out within the next week.


This video contains a number of charts of currency pairs which involve the Canadian Loonie. There are several pairs involved and different time frames.
It appears to me from all of these patterns that the Loonie will soon be appreciating in value.

Here are some articles that contain some interesting views, Many people are becoming experts as to Canada’s finances.

US dollar net longs slip; yen longs rise again -CFTC, Reuters - Reuters
Fri, 22 Jan 2016 21:23:49 GMT
NEW YORK, Jan 22 Speculators reduced bullish bets on the U.S. dollar for a fourth straight week, as net longs fell to their lowest level since late October, according to Reuters calculations and data from the Commodity Futures Trading Commission ...

UPDATE 1-Canada inflation rate rises in December as food costs surge - Reuters
Fri, 22 Jan 2016 13:43:00 GMT
OTTAWA Jan 22 Canada's annual inflation rate rose in December as food prices surged, Statistics Canada data showed on Friday, suggesting the impact from the lower Canadian dollar was being felt. The annual inflation rate ...

The Big Shortfall: It's all about the economy as Parliament returns - Ottawa Citizen
Fri, 22 Jan 2016 19:35:36 GMT
commodity prices, a dipping Canadian dollar, sluggish economic growth and costly campaign promises are proving a mammoth financial headache for the government, and, with Parliament set to resume Monday, could soon be a political one as well ...

Fall in USDCAD just a correction, not a trend change -
Fri, 22 Jan 2016 16:18:39 GMT
trade idea highlights the foolishness of picking a bottom in a falling market where there is absolutely no evidence that the downtrend is pausing. It was based on too many assumptions rather than facts. The other major failing is that the author ...

Beat the loonie: Deals for Canadians travelling abroad - National Post
Fri, 22 Jan 2016 13:01:53 GMT
the Canadian dollar hovering below 70 cents, it's a tough travel world out there. Trips to traditional sun spots favoured by Canadians are proving outrageously expensive. Luckily, there are tricks you can use to soften the blow and deals to be had ...

Canadian wine prices may be on the rise as low loonie crushes wine makers -
Fri, 22 Jan 2016 12:37:53 GMT
There could be a pleasant finish for local wine makers – the low loonie is making Canadian wine more appetizing to U.S drinkers. “Fifty percent of our products are exported across the world,” said Slingerland. “Our wines over the last three years are ...

Jobs cut, loonie's rut & oil's glut: BUSINESS WEEK WRAP -
Fri, 22 Jan 2016 23:01:30 GMT
Layoffs were a dominant theme this week as two major Canadian companies announced plans to cut back on jobs. First it was PotashCorp announcing plans to shut a potash mine in New Brunswick, putting 430 people out of work. In a town where theļ¾ ...

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