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Home » Online Forex Trading Blog » 10 Reasons The Canadian Dollar is Falling Fast

10 Reasons The Canadian Dollar is Falling Fast

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  1. Falling oil prices – Canada is the world’s third largest exporter of oil (and most of it going to the US) so when oil falls, the Canadian dollar plummets
  2. Americans not buying Canadian – Canada is an export driven country which the United States as it’s biggest consumer. When Americans tighten their purse strings Canada feels it.
  3. Traders Follow the Trend – Just like in fashion, going against the trend will often leave you looking like a fool. In the forex market, the trend is your friend. Follow it until there is a very big and obvious change in direction.
  4. Record lows only the beginning – The Canadian dollar is at its lowest level since 2004. Until it makes the cover of a major news paper or magazine, it is likely to continue lower. There is an old trader mentality that by the time the traditional media catches on to a trend, it is time to get out.
  5. Officials won’t talk about deficit – When Canadian officials dance around questions it is time to panic. Americans are used to a lack of answers from officials. In Canada it is time to worry.
  6. Growth or lack their of – With the impending Global recession the Canadian dollar will be crippled by the inability to export their goods. No one is going to want Canadian products if they don’t have jobs.
  7. Falling Interest Rates – In the forex market higher interest rates are typically good thing. Higher interest rates lead to an injection of foreign capital seeking higher returns on their money. It also drives something called the carry trade. Falling interest rates lead to investors moving their money where they can get a better return
  8. Unsecured Bank Borrowing – Canada is providing insurance for unsecured bank borrowing. While this is a good thing for consumers who borrowed from unsecured bank, it is another massive expensive in a time where the Canadian deficit is rising
  9. Shrinking GDP – Another sign of falling growth. Gross domestic product will decrease .4% to 1.8%. There is also a lack of available credit. Canadian banks are making it very difficult to borrow money and inflation is at just 1%.
  10. Downward Momentum – There is a lot of momentum built up behind the falling Canadian dollar and it is hard to stop a flood, or in this case Niagara Falls.

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About the Author -

Rebekah ManningRebekah started in the Forex industry as an intern in 2001, and worked her way up the ranks to a C-level management position. She enjoys the field of trading as well as MMA fighting, shooting ranges, and action movies.

2 Responses to “10 Reasons The Canadian Dollar is Falling Fast”

  1. Interest Rates » 10 Reasons The Canadian Dollar is Falling Fast

    [...] Read the rest of this great post here [...]

  2. Plumbers Camarillo

    Poor Canadians!

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