Canadian Dollar (95.83 U.S.)

Now I would like to see the Canadian Dollar settle back to retest its June 2006 high in the area of 91 cents in U.S. funds.

Canadian Dollar (95.63 U.S.)

The Canadian Dollar (Loonie) remains in the throws of a powerful resource related uptrend, but I was impressed when it became apparent that we would see what I now call a SURGE within the uptrend. I cannot fail to observe that for offshore investors, a surging dollar sinks all boats.

And smack in the middle of all of this, Canada’s money czar chose to raise rates a quarter point as a parting gesture. Perhaps he doesn’t live in industrial Ontario.

Before the rate hike, I had assumed that the Loonie SURGE (short term spike) was over for the most part. I was looking for a quick reactionary correction within the ongoing uptrend, or possibly short term consolidation.

I have not revised my forecast. (My math models don’t respond to news flashes) but the rate hike conundrum is not lost on me.

Out beyond the moment, I’m looking for an eventual recession to finally solve the soaring oil and Loonie problems. This recession forecast is still a bit beyond the horizon, and most of my investment related quantitative measurements are not picking it up as yet. I need more evidence.

What if I’m wrong about a recession settling the soaring oil/loonie problem? If it doesn’t show up as I expect it will, I will be shifting my focus to concentrate on committing funds to the best of the few remaining public companies that do their primary business in Canada. I’m doing my homework. It’s an uncertain world.

Footnote: I have to record my opinion that the Bank of Canada has been responsibly managed under its departing leadership. I’m surprised by the recent turn of events, but I realize that BOC visibility is infinitely greater than my own. So far I have not heard a BOC elaboration on the reasons behind the hike. I’m not alone in my recognition that rate hikes tend to push currencies up, and many Canadians are aware of the reality that Canada’s industrial heartland (Ontario) is under severe currency-related economic stress. What am I missing here??