Loonie=$1.0

[~Sophia~]

Today the Canadian dollar reached parity with the U.S. currency for the first time in 31 years.

[softwareNerd]

Even cheaper for you to visit the US now, Sophia!

From the looks of things, the U.S. government seems intent on diluting the value of the dollar faster than other western countries. So, you can expect the Loonie to get (relatively) stronger for a while.

Edited September 20, 2007 by softwareNerd

[Guest Xijkujn]

The EURCAD and AUDCAD charts look like they're already reversing (so the CAD may have made it's move).

Longs outpace shorts by 5 to 1 on the USDCAD, they've been hammered on the way down, helping to fuel the increase in value in the CAD.

I'm expecting the Aussie dollar to increase 13 cents to parity with the Canadian dollar, and to do the same (1:1) with the US dollar however at a slower rate.

So what does this mean?

The CAD rally on the crosses seems over, the CAD also has a high correlation with oil, and oil throughout this last week was making the $80 the $83 and so on..

I'm expecting a reversal, not only in CAD, I don't know when but I think XAU/DOLLAR (Gold) is going to move under $700 soon.

Oil may stay high due to geopolitics.

Gold, if it goes down, may move under $700 but if there's definitely a war with Syria, Iran or a Lebanese front remember Gold isn't a 1:1 inflation hedge, but it's a good crisis hedge and it is only a good crisis hedge when there is a reasonable expectation a crisis may materialize.

For instance, gold rallied $55 in two days when the Israeli Lebanese front flared up in 2006.

#edit: And if anyone remembers it may have moved from $600 to $732.5 an ounce in April/May 2006 perhaps because in April there was massive speculation of an Israeli air strike on Iran in either April or May of 2006.

The directional moves in most asset classes as of late is a direct result of the 50bp cut by the Fed.

In my opinion this is not enough to justify the increase in value of these asset classes, especially when you consider the fact lowering interest rates truly does offset inflation (you never hear this in the news).

The stock market is exempt from this view, however (it's unequivocally time to buy certain stocks).

Edited September 23, 2007 by Xijkujn

[$$$]

I can not count the number of "economic experts" (co-workers, bloggers, etc...) up here in Canada who were so happy our dollar was at par and "beat" the American dollar. As even saying anything nice about America up here makes you a pro-American who deserves verbal abuse, I had people laughing at me for liking America now that our currency was "better". America is going down the tubes, it's over, it's "empire" is falling, blah blah blah...

Well it took 30 years for the Canadian dollar to get to par, and it lasted about 2 months. Dollar is under par now. What a "victory".

[Scott_Connery]

I think caring about the specific exchange rate is sort of silly. Canada could recall all its money and exchange it for new ones that made a Canadian dime equal to $1, but it wouldn't actually mean anything about either of the two country's economies.

Now, obviously, this specific case does show that the USD has fallen relative to the Loonie, but it doesn't signal that Canada's economy is bigger or stronger than the US economy.

[LiberTodd]

I've had about 50 dollars Canadian stowed away just in case something like this happens. No lie. I'll post pics if you don't believe me.