Canadian Dollar Gains Most Since 1950

I have been Long Canadian Dollar; think Canada has their affairs in much better shape than other countries (US UK), as well, Canada has the strongest banking industry. In addition, Canada has good resources. But Canada's currency suffered a bit during the recent US $ run up. However, why would one ever trade CAD for USD? USD is fundamentally unstable and in particular with what the US is doing and where it says it is going. The fundamentals are for Canada.

However, as the linked article reports a number of on Wall Street and Bay Street think the Canadian dollar is over done. But TD Securities, disagrees and thinks the Canadian dollar will be at par with the US by end of the year.

I agree with TD Securities. Canada is better managed than the US, and has stronger industry. Keep your investments in those strong resource currencies and avoid those which governments have announced QE quantitive easying (printing money).

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May 30 (Bloomberg) -- Canada’s currency rose the most in a month since the Korean War as investors stepped out of the haven of the U.S. dollar in search of assets with higher returns.

“Traders and speculators continue to push, and the U.S. dollar is so receptive to weakness that it’s an easy case to make,” said Eric Lascelles, Toronto-based chief economics and rates strategist at TD Securities Inc. “It’s the risk-appetite story right now that’s dominant.”

The Canadian currency, known as the loonie for the aquatic bird on the one-dollar coin, rose 9.3 percent this month, the most since at least October 1950, according to data from the Bank of Canada and Bloomberg. Stocks advanced and commodities rallied, led by energy, as the slumping greenback boosted demand for raw materials as a hedge against inflation. Raw materials account for more than half of Canada’s export revenue.

The loonie appreciated to C$1.0915 per U.S. dollar in Toronto yesterday, from C$1.1925 on April 30. It touched the strongest level yesterday since Oct. 6, C$1.0892. One Canadian dollar buys 91.61 U.S. cents.