Can the Canadian Dollar continue to rise after it has been a surprise throughout the year? The answer is yes, and economists believe that once you see the oil price jump and so many economic and stock news indicators that the currency is overbought. This can happen when many investors are short the currency, so they need to try to short sell to flip it to a strong rally.
Many analysts say that the Canadian Dollar will only remain in a weak market through the next couple of months until the world economy picks up. The continued weakness in manufacturing and the debt downgrades from US businesses all mean that exports will remain weak due to a trade deficit.
The export industry was expected to pick up as the US dollar started to lose strength, but that is not the case as consumers are afraid to buy because the cost of imports has gone up and that means they have to spend less. That means fewer sales for manufacturers and fewer jobs for those Americans who work in manufacturing plants.
The Canadian Dollar is at an all time high because of the weakness in the economy and the major trade deficit with the US. This is why the Canadian dollar has risen significantly and it has been oversold for quite some time now. For the last several months there have been many, many analysts who are saying that the Canadian Dollar will fall and that is exactly what has happened.
The Canadian Dollar has fallen too far as the US has been seen through the lens of a weaker economy. There has been more selling as the markets fear that the dollar is going to go lower and that has hurt the Canadian Dollar and forced the Bank of Canada to cut interest rates again, causing inflation and slowing growth.
Another problem is that people have lost confidence in the value of the dollar due to the central bank’s decision to increase interest rates and now to start cutting consumer confidence. Noone knows how the economy will evolve, so we may see this play out for the next two years or more.
One thing is for sure, the Canadian Dollar is really oversold right now and a lot of analysts are predicting that the currency will fall further. So where is the best time to get in on the rally?
Let’s take a look at the numbers to see where the demand is coming from and where the supply is coming from and how quickly banks stop offering these shorting opportunities. If you can get in at the right time and hold out until the markets have moved, then you stand to make a profit.
Now let’s take a look at where the Canadian Dollar is today, especially with the news of lower manufacturing sales, the cheaper imported goods as the economies of Europe slump, and the ongoing political uncertainty in North America. People are worried about spending money on an uncertain economy and the financial problems within the US and now Canada.
It is not just with the Canadian Dollar, that we can see that a lot of people are worried about the U.S. economy, but with all economies in the world. The weakness of a manufacturing sector and weak consumer confidence is a concern because if the Chinese economy continues to grow at the same pace it is doing, we will see an even stronger Canadian Dollar that continues to push the currency higher.
With the credit market spreads increasing as banks allow borrowers to borrow at more unfavorable terms and as the dollar continues to weaken, we will see a further rise in the Canadian Dollar. This will end up making people lose more money as they have to pay higher prices to make up for the increased price of imported goods, but at least the Canadian Dollar will be strong.
So where is the best time to make money off the Canadian Dollar? You can be successful from here, and if you can get in early you stand to make a nice profit.