One FX strategist says he expects the Canadian dollar to be trading around 72 cents U.S. around the end of the year, adding the loonie is currently trading near that level.
Take that, America.
Never underestimate the strength of Canadian resolve in the face of enemy action.
It’s going to be an interesting time. What’s the point in holding currency in an isolationist state? What can you trade it for? And while China is in a position to take over as the global currency, that would require relaxing the reins on their currency, which I don’t think they’re ready to do. A good part of what makes an international currency useful is trust in the currency. America doesn’t have much left to lose, and China still needs more to be in that position. If the EU played it right, they could slip into that role, but I don’t know if they’re in a position or have the interest to do it, either. Gold standard, anyone?
I mean, the EU couldn’t really stop people from just moving towards the Euro. Unless I’m missing something it’s the obvious candidate.
Now that I’ve thought about it a bit, measuring fluctuations in terms of some kind of weighted basket of other currencies would be best, although that’s a bit more complicated.
They could position themselves to not be as attractive, which i suspect goes against their current policy. The biggest issue is global confidence. I’m not sure they’re there now, and with some of the issues with some countries’ economies having a negative impact on the Euro, they may not be able to increase confidence sufficiently without hurting those countries or perhaps other countries to compensate for that. So not so much stopping others from using it, but not doing enough to raise that confidence sufficiently.
This is entirely speculation on my part, and not something I’ve studied intensely. I’m sure some economist could point out enough holes to make that look like a screen door, but there are only a handful of currencies that have the value, economic stability, and management philosophy to really fit the bill.
It’s going to be an interesting time. What’s the point in holding currency in an isolationist state? What can you trade it for? And while China is in a position to take over as the global currency, that would require relaxing the reins on their currency, which I don’t think they’re ready to do. A good part of what makes an international currency useful is trust in the currency. America doesn’t have much left to lose, and China still needs more to be in that position. If the EU played it right, they could slip into that role, but I don’t know if they’re in a position or have the interest to do it, either. Gold standard, anyone?
I mean, the EU couldn’t really stop people from just moving towards the Euro. Unless I’m missing something it’s the obvious candidate.
Now that I’ve thought about it a bit, measuring fluctuations in terms of some kind of weighted basket of other currencies would be best, although that’s a bit more complicated.
They could position themselves to not be as attractive, which i suspect goes against their current policy. The biggest issue is global confidence. I’m not sure they’re there now, and with some of the issues with some countries’ economies having a negative impact on the Euro, they may not be able to increase confidence sufficiently without hurting those countries or perhaps other countries to compensate for that. So not so much stopping others from using it, but not doing enough to raise that confidence sufficiently.
This is entirely speculation on my part, and not something I’ve studied intensely. I’m sure some economist could point out enough holes to make that look like a screen door, but there are only a handful of currencies that have the value, economic stability, and management philosophy to really fit the bill.