Stock Market News & Stocks to Watch from StraightStocks » Us Dollar

The Euro Is Overvalued

David Taggart — Fri, 13 Nov 2009 10:17:37 +0000

One of our major themes here at The Macro Trader over the past two years has been to short Europe. We mean that in a general sense as we have been short Spain and Italy off and on for over a year and are bearish on most things EU relative to most of the world. [...]

8 ETFs to Preserve Your Wealth

Simit Patel — Mon, 29 Sep 2008 10:11:11 +0000

As is becoming apparent, the US is heading towards a depression, and given the nature of the proposed bailouts as well as restrictions on short selling, it seems as though the depression will be inflationary. The most notable characteristic of an inflationary depression is currency devaluation. If that’s the case, how can [...]

US Dollar and Treasury Bonds Will Not Escape This Correction

Bill Bonner — Mon, 22 Sep 2008 19:01:11 +0000

Ben Bernanke and Hank Paulson are planning the biggest bailout of financial markets in history. It could cost the taxpayer somewhere in the region of $1 trillion. But the market will triumph over the interventionists, says Bill Bonner. The biggest credit bubble in history is due a correction, and there is little the Fed or Treasury [...]

Early Indicators: End of Wall Street As We Know It

Contrarian Profits — Mon, 22 Sep 2008 18:38:13 +0000

– Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), the two last major investment banks left standing after the carnage Wall Street, have ended the era of investment banking by changing their status to bank holding companies. The change means the two firms can now create commercial banks that will be able to take deposits. – The [...]

4 Real Assets Set to Profit from the Death of the Dollar

Contrarian Profits — Mon, 22 Sep 2008 18:25:33 +0000

The headlines are dramatic. Short selling banned for 799 financial institutions. $50bn injected into money markets. Plans for a massive bailout fund to clear the system of bad debt and stabilize the housing market. The Unholy trinity – the Federal Reserve, SEC and Treasury – has pulled out all the stops this time. But while US [...]

A Dang Good Year for AUDCAD … So Far!

Jack Crooks — Mon, 07 Jul 2008 18:20:30 +0000

A Dang Good Year for AUDCAD … So Far!

If you bought the Australian dollar and simultaneously sold the Canadian dollar at the beginning of the year and you’re still positioned like that then you’re probably a pretty happy camper. That’s because year-to-date AUDCAD (Australian dollar vs. Canadian dollar) has jumped 1,000 PIPs – or 11.4%. And in the world of forex, that’s a huge move.

And having just tested its highest level in more than three years, we begin to wonder if this pair could be running out of gas. Buy-and-hold strategists will tell you the trend is your friend, so keep buying and holding. But we’ve got a different philosophy that keeps us asking: when is the trend not your friend? And when is the trend going to reverse and take you to the cleaners?

Right now may be one of those times … or it might not. But to us, the one-way climb and the underlying sentiment make this pair vulnerable to downside moves.

Much of our hesitation at these levels is because of our expectations for the US dollar. That’s because the Canadian dollar (a commodity currency) has become less tied to other commodity currencies (e.g. Australian dollar) and somewhat more correlated to the US dollar.

Why? Mostly because Canada’s economy is closely tied to the wallowing US economy. But maybe, just maybe, the dollar has found a bottom for a little while. If so, then maybe the Canadian dollar gets a little boost as well and outperforms fellow commodity currencies and the rest of the major currency pack during a period of dollar appreciation.

Taking the short side of AUDCAD is something to consider. Certainly a decent risk-reward set-up, we think.

Regards,

Jack & JR