July Currency Matters.pdf


Preview of PDF document july-currency-matters.pdf

Page 1 2 3 4 5 6 7 8 9 10 11

Text preview


Because economic growth is stronger in the US, US interest rates are rising relative to Canadian rates
and this favours the US dollar…
Weekly CAD=, US2YT=RR, CA2YT=RR
Value BarOHLC, CAD=, Bid, 03/07/2015, 1.2341, 1.2412, 1.2302, 1.2376, +0.0060, (+0.49%),
0.25 Spread, US2YT=RR, Bid Yield(Last), CA2YT=RR, Bid Yield(Last), 1.0, 1.0, 03/07/2015, 0.0746

06/12/2013 - 31/07/2015 (GMT)
Price
/USD
1.28

0.2

1.27

0.15

1.26

0.1
0.0746
0.05

1.25
1.24
1.2376

Weekly USDCAD

0

1.23

-0.05

1.22

-0.1

1.21

-0.15

1.2
1.19

-0.2

1.18

-0.25

1.17

-0.3

1.16

-0.35

1.15

-0.4

1.14

-0.45

1.13

-0.5

1.12

USDCAD 2Y IRD

-0.55

1.11

-0.6

1.1

-0.65

1.09

-0.7

1.08
1.07

-0.75

1.06
Auto

Auto
Dec Jan
Q4 13

Feb Mar
Q1 2014

Apr

May
Jun
Q2 2014

Jul

Aug
Sep
Q3 2014

Oct

Nov Dec
Q4 2014

Jan

Feb Mar
Q1 2015

Apr

May
Jun
Q2 2015

Jul
Q3 15

If the capital markets become unsettled because of fallout from Greece or other high risk events, US
interest rates could fall and the dollar rise in a flight to safety play. There is not always a positive
correlation between interest rate differentials and exchange rates; it depends on why interest rates are
rising or falling.