Attn: Canadians – believe in your currency – Canada’s in the Catbird seat

Posted by Bloomberg article - comments by Dennis Gartman - Jim Rogers

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Canada Dollar Trades Near 5-Week High as Stocks, Oil Fluctuate

By Chris Fournier

July 22 (Bloomberg) — Canada’s dollar traded near the strongest in more than five weeks as U.S. stocks and crude oil, two of its main drivers, swung between gains and losses.

The loonie, as the currency is called for the aquatic bird on the dollar coin, is the best performer versus the U.S. dollar among the 16 most-traded currencies so far this month. In June it was the laggard. It tends to rise and fall with stocks and commodity prices as a proxy for investors’ appetite for risk.

“Commodity currencies are starting to lose momentum,” said Ian Stannard, a currency strategist in London at BNP Paribas SA, France’s biggest bank. “Caution with long positions is currently the way to play things.” A long position is a bet a currency will rise.

The Canadian currency appreciated 0.3 percent to C$1.1001 per U.S. dollar at 4:43 p.m. in Toronto, compared with C$1.1037 yesterday. It touched C$1.0951, the strongest since June 11, after falling earlier as much as 0.5 percent. One Canadian dollar buys 90.90 U.S. cents.

….more HERE.

Article by the Legendary Jim Rogers

“Canada is probably one of the better-placed countries in the world right now, and the Canadian dollar is probably one of the soundest currencies in the world right now, on a fundamental basis. I have only good things to say about investing in Canada

….full article HERE.

Below from David Rosenberg of Gluskin Sheff (one of the few economists who saw the crash coming:

WE LIKE THE LOONIE, BUT NOT AT LOONY LEVELS
We are long-term bullish on the Canadian dollar, but at 91 cents, we are near-term cautious.

As an aside, and this comes down to the 91 cent Canadian dollar, we are long- term bullish but near-term cautious.  The key commodity index for the Canadian dollar is NOT the CRB index but rather the Bank of Canada commodity price index and it has lagged due to the fact that some key resource prices that are important to Canada, such as wood products, natural gas and in the farming sector, have lagged behind.  From where commodity prices are today, the CAD should be trading at 82 cents.  On the flip side, from our analysis, the Canadian dollar is trading as if it is discounting a 20% increase in commodity prices from here.  This may in fact happen, but like the equity market, what it means is that there is a lot priced into the loonie at current levels.  Upside is, in a word, limited.

From Dennis Gartman below:

Comment from the Ledendary Trader Dennis GartmanFor subscription information for the 5 page plus Daily Gartman Letter L.C. contact – Tel: 757 238 9346 Fax: 757 238 9546 or E-mail:dennis@thegartmanletter.com HERE to subscribe at his website

“Finally, we watch somewhat in dismay as the Canadian dollar rises rather smartly relative to the US dollar. We are long of the C$, but we are clearly not long enough.  Convinced that “parity and beyond” is only a matter of time, we bought the C$ two weeks ago when it was trading 1.1485. This morning it is trading 1.0975 and has not corrected even by the barest of corrections along the way. Simply put, we’ve not been given the opportunity to add to this position, and that is what makes us angry, for being right in the markets initially is easy, but one does not make up for one’s myriad idiotic trades by having one good trade. One does so by adding to the good trades. We’ll not add to this position until we’ve had a two or three or four day correction, and that will come when least expected.  All we know at the moment is that few in Canada believe in their own currency, but we do. Canada finds  itself in the virtual “cat-bird seat,” owning the “stuff” such as grain, base metals, energy, water et al that the rest of the world needs…and it holds them in a nation that still holds true to the sanctity of contract; still believes in the rule-of-law; has the infrastructure necessary to export that “stuff” and is willing to do so.”

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Ed note: the next two charts are a Canadian Dollar  ETF

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Comment from the Ledendary Trader Dennis GartmanFor subscription information for the 5 page plus Daily Gartman Letter L.C. contact – Tel: 757 238 9346 Fax: 757 238 9546 or E-mail:dennis@thegartmanletter.com HERE to subscribe at his website