CDN $ Reversal?

[TOM4CWB]

"Canadian currency closed out the North American session at 85.38 US cents (C$1.1712) on Wednesday. This compares with Tuesday's closing mark of 85.53 US cents (C$1.1692).

Analysts said stronger commodity prices kept the Canadian dollar afloat Wednesday, despite the downward pull that lasted from Tuesday's Federal Reserve interest rate announcement.

Wednesday afternoon saw Bank of Canada Governor David Dodge speak to the New York Association for Business Economics. In his speech and news conference afterward, Dodge kept his remarks mostly to broader, global issues.

The CDN$ market factor for the day came from comments made by Dodge. Addressing a group in New York today, the CDN central bank chief said that the standard of huge global imbalances could lead to a global recession, or at the least a slow down, in the near future. This grim forecast was a double-edged sword for the Canadian economy. If, on the one hand, economies began to address and correct the global imbalances; the Canadian economy's dependency on its strong export market would see a large divot taken out of its GDP. On the other hand, allowing the imbalances to persist - and slowing the global economy - would similarly dry up global demand that has been the bread and butter for many Canadian raw-material producers that ship their goods abroad.

Market watchers are expecting much activity in the next two sessions, as Canada's January gross domestic product data will be released Friday."

"European session hours drove the loonie to 1.1750 for the first time in since January 19th. This level has contained dollar exuberance since December of last year, and it played its part once again in today's rally. While the daily time-framed chart illustrates a clear and steady decline in the Canadian dollar, the intra-day chart has shown increasing pressure to turn the loonie back on a bullish avenue. Swings in the USDCAD throughout the day have presented lower highs, while horizontal support at 1.1710 was hammered with multiple tests."
(Canada's Dodge Spreads Gloom To Currency Mar 29, 2006 (DailyFX via COMTEX) & Canadian Forex/Bond Review: C$ Weaker WINNIPEG, MB, Mar 29, 2006 (Resource News International via COMTEX)http://news.tradingcharts.com/futures/8/0/77126108.html

Where will this info lead the CDN$?

[melvill]

Tom4cwb, in Winnipeg you listened to the chief economist with a major Canuck bank, CIBC, I think saying that in, his opinion, the dollar was headed toward the 92-cent level.

I remember hearing that chief economist' predecessor at a outlook talk six or seven years ago. He talked about how difficult and frustrating it was he forecast the buck. He said, his specialty as a professor of economics at Dalhousie University, was studying and forecasting forex rates. He said that at the bank there was himself and 12 other Ph.Ds trying to forecast the dollar and in his time at the bank the 13 of them hadn't gotten it right even once.

[TOM4CWB]

Lee;

Larry Martin of the George Morris Centre told us that using futures was a suicidal move... that only OPTIONS should be used in the currency market.

Being that the CDN$ is up 3/4 of a cent this morning... I would have to agree.

The US dollar is weaker... which has caused the CDN$ to rise.

[charliep]

Any other thoughts about buying calls?

Information is good but my focus is how a farmer turns information into decisions. A part of this is risk assessment. There are litterly dozens of risk management products available so every manager has to choose the best products for their business that provides coverage for an acceptable costs.

[pilllypilsner]

"the us dollar is weaker which has caused the canadian dollar to rise"??
-global imbalances will cause the canadian dollar to fall???
what kind of commodity forum is this!
-the cando is rising because of higher commodity prices-it WILL continue to rise
-this is good not bad for grains
-in the 70's/early 80's we had a strong cando and high prices
-nothing goes up in a straight line
-someday we are all going to look back on this as if it were a bad dream
-20$ wheat in three years or i'll never post again

[malleefarmer]

the aussie dollar has fallen 3 cents in a 10 days to around 70.5 to 71 US

[cowman]

Pillypilsner: If you can guarantee that $20/bu wheat thing I am going to drag the old plow out of the bush and get it ready to start breaking up sod!

[jensend]

-20$ wheat in three years or i'll never post again

$20 wheat means what $4 nitrogen???

[carebear300]

I will take my chances on the price of N and everything else, just give me $20 bushel wheat just once!!!!!!!!!

[cowman]

And furthermore pilly, if you can pull this off we are all going to nominate you for agriculture minister! LOL

[pilllypilsner]

cowman-what was the price of wheat in 67?i'll guess a dollar or two.in 67 dollars were backed buy .80 oz's of silver.fridays silver close was 11.49.
yes everything will cost more but a farmers "leverage" is the price of his product.keep your eye on this ball jensend.the crb is in full bull market mode and it is only a matter of time till the grains catch up.when it does happen there will be all kinds of b.s.
reasons why but never the true ones.

[clancey]

The long terms trend for wheat is still intact and it is relentlessly lower. The only serious upticks are weather related. If there are several coincidental crop failures in major exporting and importing countries then the sky's the limit for wheat prices. Otherwise, any steady upward movement in price is just going to draw in production around the globe.