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Long USD, short the loonie?


Guest kawikaho
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Guest kawikaho

Anyone knows of a long USD/short loonie ETF?  My mother in law who is Canadian is visiting us, and she was asking me what the exchange rate of the CAD to USD was.  After I told her it is near parity, she frantically said she wants to shift all of her Canadian dollars to USD.  I asked her why?  And she said she's been hearing on the news that the Canadian government does not want the currency to appreciate against the USD, and will do everything to bring this under control.  I think it makes sense.  Just recently I read that China has now surpassed Canada for the first time ever as America's number one exporter.  I also think that the USD is now very oversold, and is due for a rally when the Fed stops its purchasing programs and interest rates rise.  I believe we'll see the later sometime in the middle of next year. 

 

Anyone have any thoughts on this? 

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I would be careful with this trade as one way to look at it is going long the dollar and short commodities, which I think is bad bet.  I think the US$ will be devalued versus commodities and would depreciate against any currency whose country produced commodities all else being equal.  The US spending may lead to a race to the bottom via gov't intervention but this does not always work out as intended. 

 

Packer

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The problem with the assumption is that the Canadian government cant do anything about it at all.  All past interventions have failed.  As indicated it is mostly commodity related.  As soon as the commodity rally peters out in a few months the currencies will adjust.  The best way for a Canadian to do this is to buy stock in big US based multinationals as indicated on another thread:  JNJ, GE, KFT, BRK, take your pick. 

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