US Dollar Index

[Acein8ter]

Dollar slides to 31-year low vs Canadian dollar
Fri Sep 21, 2007 2:10 AM ET

By Naomi Tajitsu

TOKYO (Reuters) - The dollar tumbled further on Friday, hitting a 31-year low against the Canadian dollar and edging near a record low against the euro as investors dumped the U.S. currency after the Federal Reserve's aggressive rate cut this week.

Support for the dollar has crumbled, dragging it to a 15-year trough versus a basket of currencies and pushing the U.S. currency above the psychological $1.40 level against the euro in the previous session.

A 50 basis point cut in the fed funds rate on Tuesday has battered the dollar as it has tarnished the appeal of assets denominated in the currency. Traders see this trend continuing given expectations that the Fed may cut rates again this year.

Article

[lozen]

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ya this is sick, whats the best thing to do with USD? Convert to Euros, because its just a matter of time before CDN follows USD.

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Not true We have not spent ourselves into debt and economiy is flying. The last time our dollar plummetted it was due to the uncertainty of Quebec as Rene won. Once we brak that $1.00 mark and stay above it who knows. Lets face it our future is determined greatly by the American voters. If they allowed 3 terms and Bush won again we could see 1.10.

[woodguy]

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Not true We have not spent ourselves into debt and economiy is flying. The last time our dollar plummetted it was due to the uncertainty of Quebec as Rene won. Once we brak that $1.00 mark and stay above it who knows. Lets face it our future is determined greatly by the American voters. If they allowed 3 terms and Bush won again we could see 1.10.

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Also, the majority of the Canadian economy is commodities:

mining products (lots of base metals), agriculture, forestry, oil & gas, etc.

The prices on many of these commodities are at record or near record highs with strong demand from China & India replacing the usual US demand. (lumber prices are in the tank, but most of the others are doing very well)

While the Canadian economy is still strongly linked to the US (more than 80% of our exports just go straight south), the tie isn't quite as strong as it used to be.

The manufacturing sector of our economy is taking a beating over lower US demand and high exchange rate, but there are still very strong fundamentals in Canada which lead me to believe that $1US = $0.95 Canadian will happen before January.

[petp_the_greek]

canada (as well as norway, australia, new zealand, and to some degree brazil as well) are commodity currencies....~20% of the cad GDP comes from commodities, so if oil goes up, all the mentioned currencies go up. throw in the fact that the US is cutting rates, and the previous mentioned countries are on a hiking bias, then their currencies will continue to strengthen.

for what its worth, i think oil (and cad) is overbought and will be lower by yearend. add in the recent news of a proposed increase of royalties on oil producers there and its time to take your profits and run.....for now at least.

[dazraf69]

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for what its worth, i think oil (and cad) is overbought and will be lower by yearend. add in the recent news of a proposed increase of royalties on oil producers there and its time to take your profits and run.....for now at least.

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QFT

[woodguy]

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add in the recent news of a proposed increase of royalties on oil producers

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If you are referring to the proposed increase in royalties in Alberta, the increase has minimal impact (percentage wise) on most, if not all oil companies doing business here.