We have hit it at last, parity for the USD/CAD. The low in the last hour reached .9998. Let us review the last week and then what that means.
I was looking at the pair last week and even prepared an image on the 12th to discuss that this was going to be the run down to parity. Too bad I didn't get this posted then. As you may be able to tell, I got in the trade at about 1.0480. Not too shabby. Today the pair is just a continuation of that move. Rather than looking at the daily candles showing you the last week of the price dropping, here is the intraday chart looking at the hour candles so you can see the magic of hitting the $1=$1 mark for the pair...a moment of silence if you don't mind... Ok that is enough, back to work.
I was looking at the pair last week and even prepared an image on the 12th to discuss that this was going to be the run down to parity. Too bad I didn't get this posted then. As you may be able to tell, I got in the trade at about 1.0480. Not too shabby. Today the pair is just a continuation of that move. Rather than looking at the daily candles showing you the last week of the price dropping, here is the intraday chart looking at the hour candles so you can see the magic of hitting the $1=$1 mark for the pair...a moment of silence if you don't mind... Ok that is enough, back to work.
What does it mean? Why have I had a focus on this level? Why can't I think of anything witty to say? The whole world is full of puzzling dilemmas today.
Here is a historic perspective and a trivia question that will make you look smart at the water cooler or your next dinner party. When was the last time the USD and the CAD were at parity? Many of you may be saying never, you're wrong. It was 1976. Now I need you to start thinking of what was happening during the mid to late 70s. If you are not old enough or informed enough, let me help you. The mid to late 70s were riddled with high inflation, high gas prices, high interest rates and rising unemployment. Could we be heading toward similar times? Let's see, inflation and commodities are high, check. Oil is near record highs as well as gas, check. Interest rates were cut by the fed by home interest rates are on the rise, check. Unemployment...we are still OK but we did see our first layoffs in the non Farm payroll numbers this past month. hmmmm interesting.
What does the future hold, short term doesn't look so bright. Future could be "totally awesome to the max." More on that in my next post.
1 comment:
Hi Blake -- Well, I didn't get into the USD/CAD with a 1.04 handle as you did, but I did enter on Tuesday just below 1.02 -- I felt comfortable (not necessarily ecstatic) with my position and put a pretty tight stop on it. So, needless to say I'm feeling good with it today -- it's sort of a "whoo-we" USD/CAD but "boo-hoo" the US economy. But I'm certainly paying attention to your thoughts on a possible pull back and planning an exit. By the way, for those of us who do remember the '70s -- the low point on the pair in 1976 was just about the same time then President Jerry Ford was walking around sporting a WIN ("Whip Inflation Now") button -- didn't do a whole lot of good and just a couple of years later the prime rate ran close to 20%. -- Bill
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