Hi are you one of the Barclays boys who messed it up .............Can you tell me since you have worked in Currency markets how the American Dollar is going to continue to strengthen long term when they are printing trillions of dollars to finance bailout after bailout and now the USA government is going to print trillions more in the case that the Banks collapse there and guarantee savers deposit . It takes no rocket science to see that the value of the dollar will sink in the long term
And regarding my comment about Treasury Bonds a quick search on Google showed many links by wiser minds than mine who have said exactly the same thing . I suggest that you take a look,
Loonie takes steepest one-day dive ever, trading extremely volatile
1 day ago
TORONTO — The loonie posted its biggest one-day decline on record Friday, falling almost five cents against the American dollar at one point, but began to rally in the last half-hour of trading.
The dollar fell as much as 4.87 cents in the afternoon to trade as low as 82.41 cents US, according to the Bank of Montreal's currency desk.
However, the dollar's value continued to bounce wildly. It had recovered more than 1.5 cents from its low within minutes. The loonie was at 84.28 cents US at 3:30 p.m., down three cents from Thursday.
The loonie has now lost more than one-quarter of its value since hitting an all-time peak of 110.3 cents US last November, after a rapid three-month rise that began in the summer of 2007.
According to the Bank of Canada's exchange rate website, the dollar hasn't fallen more than 3.38 cents US in one day in modern history. That occurred June 21, 1961.
The dramatic fall of the loonie this month reflects the impact of lower commodity prices, especially oil, along with weak economies around the world and concern that even Canada's sturdy banks are being effected by a global credit crunch.
An economic note from Scotiabank said the loonie is "showing no signs of ending its losing streak against the U.S. dollar."
The loonie is also being sideswiped by rising demand for the U.S. dollar as the United States government tries to borrow heavily in global money markets to finance its $700-billion bailout of banks.
Ironically, the greenback is currently in huge demand because of the U.S. troubles and global economic uncertainty.
Fund managers from around the world are buying up U.S. Treasury bills - historically considered one of the most conservative investments - and need American currency to do so.
That has resulted in a strengthening of the greenback against other currencies this month, including a drop of nearly 10 cents US for the Canadian dollar since it closed at 93.97 on Sept. 30.
However, Jayson Myers - an economist who now heads the organization that represents Canada's manufacturers and exporters - said the Canadian dollar may bounce back quickly.
"The forces that are pushing up the U.S. dollar right now may not be permanent," said Myers, president and chief executive of Canadian Manufacturers and Exporters.
The Canadian dollar's fall may be followed by a rapid rise if the U.S. economy goes into a major recession or if foreign investors "find a better place to put their money than in U.S. dollars."
"It's just guesswork right now for anybody. I don't know if anybody can really forecast where the dollar is going," Myers said.
The loonie's plunge Friday came despite a report from Statistics Canada that the country generated a record number of new jobs last month and more support for the financial system from Ottawa.
On Friday, Finance Minister Jim Flaherty announced that the federal government will buy up to $25 billion in residential mortgages held by the chartered banks, to give them another source of cash.
The transaction will be made through the Canada Mortgage and Housing Corp., a federal Crown corporation, which has already guaranteed the mortgages originated by the banks. The CMHC is scheduled to make its first purchase of up to $5 billion on Oct. 16.
If the loonie stays at current levels it will make imports of everything from Florida fruit to Boeing jetliners more expensive to Canadians and raise the costs of winter vacations in the United States.
It will also provide some relief to hard-pressed Canadian manufacturers, squeezed for the last two years as the strong currency made Canadian lumber, newsprint, machinery, furniture and other products more costly in the United States market.
However, the volatile trading in the currency makes it difficult for companies and consumers to adapt to such rapid changes.
For companies that have contracts in place where they're paid in U.S. dollars, the fall of the Canadian dollar is good because they'll get more loonies at the current exchange rates.
The higher American dollar will also lower the cost of raw materials and energy required by manufacturers to make and transport their goods.
But the bad news is that the U.S. economy is weak, Myers said.
"Even though the (Canadian) dollar is down and the cost of doing business is down, if your customers aren't buying you still don't have the business," Myers said.
