I Am Not Loonie, Are You ? CADSGD at 4 year low
The Bank of Canada “BoC” gave the USDCAD “Loonie” a nice little spanking last night but it sends a clear message for the months ahead.
The market had not expected the drastic event of the BoC abandoning their rate hike bias of over a year and we saw the USDCAD shoot back up above 1.04 towards its next resistance at 1.0420.
““In our opinion, simply adjusting the GDP and inflation forecasts downward to more reasonable rates that are consistent with reality, as well as shifting out the timing somewhat of the closure of the output gap and return of inflation to target were sufficient to convey a more dovish tone. Still we don’t alter our expectation that the next rate hike will occur in early 2015.” BoC Governor Poloz
Main worries cited.
* excessive consumer leverage
* economic weakness – export led recovery is faltering and the US shutdown leading to cross border trade uncertainties
Singaporeans hitting the slopes of Mount Whistler this Xmas have more reason to cheer for we are seeing a 4 year low in the CADSGD at 1.19 today.
No bottom in sight till 1.16 ? But I would not suppose it is fashionable for Singaporeans to buy those Canadian condos these days ?
Just stick to the skis and have a nice holiday !!
PS : The Loonie is named as such apparently because of the $1 CAD coin which carries the picture of bird called the Loon on it.