Pullback in commodities weakens CAD$
January 1, 2008
Greetings investors.
Some time ago I advised mining investors to take a hedge against weakening commodity prices by hedging the Canadian dollar.
That is starting to look like a winning strategy going forward into 2008.
Says one of my favourite commentators, “The loonie is retreating from parity with the U.S. dollar, as the Bank of Canada eyes further rate cuts in response to the expectation of weakening inflation, and as Canada’s trade and government budget surpluses appear headed for the red - thanks to the strong dollar’s drag on exports, slow U.S. growth and weaker commodity prices. Shorting the loonie and/or buying the USD/CAD pair on the forex seem like pretty safe bets to me.”
Me too.
Careful out there.
Kb
The BarkerLetter on January 17th 2008 in Commodity investing, Daily Forex Tips
