Currency trades….and nothing else matters

Daniel Weston

I feel that for us to continue being successful global macro investors in 2016, it is imperative we get the portfolios currency positions right. Views on stocks, bonds and commodities for now doesn't really matter so much in the current environment. Currencies is the source of the worlds recent heightened volatility and instability which is driving every other market. Not only in the prices, but central bank policy action and overall market sentiment. The uncertainty surrounding China's currency peg, Japan's possible quest for negative rates, the Euro's continued QE to infinity program and the current view of the Fed is pushing and pulling the worlds currencies in volatile directions that are tricky to trade. Late last week, the calculations that lead us to our US Dollar vs. Canadian Dollar currency analysis have provided a buy signal. Relative to the US, Canada's growth and inflation expectations are not falling out of bed as rapidly as they are in the US. The trade here is a case of the "least dirty shirt" when it comes to comparing the two... Read more... (VIEW LINK)


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