DislikedHi Spud,
Thanks for a great thread.
Does this mean you are trading USDCAD on fundementals rather than Stochs?
How long is long term for you?
I was surprised by yesterday's strength of USDCAD and nearly bailed out of my short. I can't see any reason for it - since the USD did not seem strong against any other currency - implying weakness in CAD, but why since the rate rose as expected?
Thanks,
IanIgnored
You are right, fundamentally the USD has no business rising against the CAD and the current short term climb after the rate announcement was somewhat expected because so much pressure downwards in anticipation was created beforehand. Everything the US has to cope with over the next 12 months from Iraq, Iran, the US election, interest rates, etc. is all a benefit to Canada. Anything that spells tragedy in oil is a boom for Canada. Housing in Canada is likley to set record prices in 2007 and this will keep pressure up on inflation with low unemployment, high gas prices, and high housing prices...so CAD has no choice but to probably raise rates to 5%. The US can't raise rates for obvious reasons. Just flip through the indicator check list on USD vs CAD and you see nothing but -'ves on US side and +'ves on CAD side.
So, take the up moves in USDCAD as opportunity to make more money and leave lots of room for volatility.