Commodities and the Canadian dollar have continued to strengthen despite the rally in the U.S. dollar. That's odd, because for nine months, the U.S. dollar was involved in an inverse relationship with commodities, the Canadian dollar, equities, and emerging markets.
That relationship ended in late November as the dollar began its now, six-week old recovery.
It was often reported, from March to November 2009, that commodities prices were rising as a by-product of the falling U.S. dollar. That, indeed was doubly so. Speculative interest in commodities was driving prices higher, while rising short interest in the U.S. dollar, and record deployments of institutional cash were sending the currency lower, against the yen, and euro...
Find out why its possible Canadian stocks, bonds, the loonie, the commodity complex could remain relatively stable, and possibly go higher, though modestly.
Read the whole article here...
Pierre Daillie (AdvisorAnalyst.com), GlobeAdvisor.com, January 11, 2009
