Saturday, August 15, 2015

Canadian Dolar: World’s Most Hated Major Currency Hits 11-Year Low

Years of near universal easy money policies led to an investment boom in commodities, which led to overproduction that coincided with languid demand, which led to a crash in prices, which led to a rout in commodity currencies. Then the Fed started its cacophony about raising rates; it pulled hot money into dollar assets, pushed up the dollar further, and left commodity currencies twisting in the wind.

Among them, one stands out: the Canadian dollar.

The rout in commodities has ravaged Canada’s oil patch and its mining sector. For example, home sales in Calgary, the epicenter of the oil patch, have plunged 25% year-to-date. Canada is in one of the most magnificent housing bubbles the world as ever seen, and when it pops in Toronto or Vancouver, there will be fireworks. But not yet. (more)

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