Wednesday, June 29, 2011

Currency trading

Got this note from my currency trader, thought it was interesting:

I just wanted to send a quick market update as the Canadian dollar has improved from the mid 0.99s (where it was trading the past two day) and has rebounded to the mid .97s (better than par). There is still fear in the market that the Canadian dollar will lose its parity over the next few weeks so I wanted to let you all know the rates as it may be a good time for you to buy USD.

Today, the Canadian dollar can contribute its gain following a stronger-than-expected Consumer Price Index reading for the month of May. Both the headline number and core number beat expectations. The result was led primarily by the energy and goods sectors specifically gasoline, fresh fruit, and insurance, according to Statistics Canada. This puts annualized inflation at 3.7%, its highest level since 2003, and well above the Bank of Canada’s (BoC) 2.0% target.

The market is waiting to see if Bank of Canada’s Governor Mark Carney, will increase interest rates because of the inflation rate. However, expectations are low that this one inflation increase will be the tipping point. Carney has been vocal in the past about the negative consequences of a strong Canadian Dollar. Carney believes that it is in Canada’s benefit to have the USD stronger than the Loonie as the recent price volatility in the commodity markets due to the soaring Loonie has negatively impacted on the Canadian economy.

As a side note, I just returned from a business trip to Arizona where I had the opportunity to meet the top real estate agents as well as an accountant, builder and a banker that specialize in dealing with Canadian clients. The Phoenix and surrounding areas are booming, demand is up and supply is down. I believe the most exciting news is that there is a banker in the US that has been successful in getting Canadians mortgages in the states. If you would like to speak to one of these individuals please email me and I can provide their information

If you would like to put a market order in to target a specific rate or you would like to know the exact rate we are trading at, please give me a call. I look forward to speaking with you soon.

Annelies van der Made, BComm
Private Client Manager - Foreign Exchange Broker
FIRMA Foreign Exchange Corporation
Toll Free: 877.423.2217
Toll Free Fax: 866.408-6946

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