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===CAD rallied higher on speculation that stronger domestic fundamentals warrant the BOC will have to hike rates sooner than anticipated. It’s not surprising that Governor Carneys policy of timing may be going step ‘n step with the Fed’s. Year-to-date the currency is up 16% and the Canadian futures market is starting to price in rate hikes sooner. Up until this week the loonie had lagged most growth currencies, but now it seems to be given its head. Currently, the market is still looking at dollar rallies as a sell opportunity. If one prefers being long the greenback, crossing it with ‘this’ commodity sensitive currency is not the ideal answer as analysts continue to favor buying the loonie longer term.
===Russia, China May Buy Canada Dollars to Diversify 5:58 am EST, 12/23/2009
Canada’s Finance Minister Jim Flaherty said China, with the world’s largest currency reserves of $2.3 trillion, may be poised to buy Canadian dollars as it seeks to shield its reserves against the U.S. dollar’s decline.
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