12 May 2010

USD/CAD : Best Risk On Trade

  • Shorting USD/CAD is probably the best Risk On trade out there. Rate differentials about to move in favor of CAD, economic fundamentals sound (eg monster job gains), strong banking system, etc. Very high beta trade though.
  • Preferred to shorting Bonds (negative carry), long AUD (China tightening+stocks look weak), long base metals (again China, poor technicals).
  • Last Thurs' spike to 1.0740 probably shaken out plenty of long CAD holders (me at 1.04 !). Now back below 1.0204 = downtrend continuation. Sell rallies towards this. Last 1.0178.
  • So - am running short USD/CAD to capture liquidity driven rally in risk assets (which I do not believe will last) and shorting S&P against that. Both these charts are pointing down for me.

1 comment:

Taichiseal said...

EUR/USD break below 1.2500 pushing USD/CAD up.