Author Topic: Are you making any moves in response to the USD-CAD exchange rate shift?  (Read 4668 times)

jodelino

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With falling oil prices, the Canadian dollar keeps falling relative to the US dollar.

I'm a US citizen who spends a lot of time in Canada and plans to spend more time there post-retirement. I've been stashing some USD in my Canadian account a bit at a time, as the CAD has dropped relative to the USD over the past year.

I've also started buying some Canadian bank stocks, which have dipped in price this year, but which pay a good dividend and have good long histories. They seem like maybe a better deal than US stocks right now. I haven't ventured into any other kinds of Canadian stocks.

Are any of you--Canadian or US citizens--making moves in response to the shifts in the USD-CAD exchange rate?

Any predictions as to how far the CAD will fall relative to the USD?

Any recommendations?

(US citizens planning a vacation--this is a good year to go north!).

johnny847

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #1 on: February 02, 2015, 06:31:35 PM »
This smells like market timing of the currency markets.

Honestly, I don't think that anybody can reliability predict what the currency markets will do. Who knows, maybe the exchange rate will become far better by the time you retire. Then again, it may get far worse. Nobody really knows.

I wouldn't act on this.

Dodge

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #2 on: February 02, 2015, 06:37:31 PM »
This smells like market timing of the currency markets.

Honestly, I don't think that anybody can reliability predict what the currency markets will do. Who knows, maybe the exchange rate will become far better by the time you retire. Then again, it may get far worse. Nobody really knows.

I wouldn't act on this.

Agreed.  There is no reason to believe there will be a "reversion to mean" with currency pairs.  Don't make the mistake of thinking you're "buying low" like with the stock market in 2008.  It's not like buying an index fund.  Putting more money in to the CAD because it's low, is much more similar to buying an individual stock because it's low.

Goldielocks

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #3 on: February 02, 2015, 06:42:48 PM »
I have less reason to buy us now, choosing international and canadian investments only. But my retirement will be in cdn dollars so that is the safe side of the currency exchange for me for the long term.

Financial.Velociraptor

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #4 on: February 02, 2015, 06:46:09 PM »
I'm considering going short EUR and long DKK.  The Danes have their currency pegged to the Euro and are seeing massive influx due to the inflationary practices of the ECB.  If I'm right, the Danes capitulate and let the Kroner appreciate and I make some easy money.  If I'm wrong, all I lose is the interest on the EUR short.

I wouldn't touch the USD/CAD rate though.  I spent about a decade in the oilpatch prior to going FIRE and can tell the oil price: she goes up, she goes down.  And there is sometimes no logic behind the movements.  Besides, if you could predict the price of oil, there are ways to play that and make a LOT more money than on USD/CAD bets...


KingCoin

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #5 on: February 02, 2015, 06:51:12 PM »
With falling oil prices, the Canadian dollar keeps falling relative to the US dollar.

I'm a US citizen who spends a lot of time in Canada and plans to spend more time there post-retirement. I've been stashing some USD in my Canadian account a bit at a time, as the CAD has dropped relative to the USD over the past year.

I've also started buying some Canadian bank stocks, which have dipped in price this year, but which pay a good dividend and have good long histories. They seem like maybe a better deal than US stocks right now. I haven't ventured into any other kinds of Canadian stocks.

Are any of you--Canadian or US citizens--making moves in response to the shifts in the USD-CAD exchange rate?

Any predictions as to how far the CAD will fall relative to the USD?

Any recommendations?

(US citizens planning a vacation--this is a good year to go north!).

Many think that the Canadian housing market looks a heck of a lot like the US market in 2007 (and with good reason). The crash is oil prices could easily be the pin prick that pops the bubble.

How did US banks fare post real estate crash? That should give you an indication as to why Canadian bank stocks are selling off.  Real estate is a confidence game, and sentiment is turning rapidly south north of the border.


jodelino

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #6 on: February 02, 2015, 08:32:12 PM »
Thanks to all of you posters for these helpful insights. I appreciate them all.

To clarify: I'm not trying to speculate in the CAD in any kind of complex way. I'm not that sophisticated. I'm just thinking: if I'm going to spend X amount of Canadian dollars in Canada over, say, the next 2 years, might now be a good time to acquire those dollars and let them sit in my Canadian money market account until I need them?

jodelino

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #7 on: February 02, 2015, 09:22:48 PM »
Thanks, Cathy, that's very helpful.

Heckler

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #8 on: February 02, 2015, 11:16:41 PM »
I've stopped shopping online from the US. 

In fact, I've stopped shopping since I met you guys and MMM!

sb_NoVA

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #9 on: February 02, 2015, 11:40:38 PM »
Thanks to all of you posters for these helpful insights. I appreciate them all.

To clarify: I'm not trying to speculate in the CAD in any kind of complex way. I'm not that sophisticated. I'm just thinking: if I'm going to spend X amount of Canadian dollars in Canada over, say, the next 2 years, might now be a good time to acquire those dollars and let them sit in my Canadian money market account until I need them?

I too vacation in Canada.  It's always a pain getting currency exchanged, foreign transaction fees etc.  Can you elaborate how you open a Money Market and fund it with USD that gets stored as CAD in cost effective way?  Getting currency exchanged is a pain. 

jodelino

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #10 on: February 03, 2015, 05:47:02 AM »
I too vacation in Canada.  It's always a pain getting currency exchanged, foreign transaction fees etc.  Can you elaborate how you open a Money Market and fund it with USD that gets stored as CAD in cost effective way?  Getting currency exchanged is a pain.

I don't do anything very sophisticated. We have a cottage in Canada and have two bank accounts at our local credit union (East Coast Credit Union): a Market Watch account, which pays interest, currently 1%, and a checking account. We deposit checks drawn on our US bank account either in person or by mail. The credit union, and I think many Canadian banks, offers the option of accounts in USD and in CAD, so that you can move money between those accounts easily, and i know Canadians who travel to the US frequently who maintain accounts in both currencies at their bank, and move money from one to another as they need it or to take advantage of a good exchange rate. At our bank the USD account doesn't pay interest, and we opted for both accounts in CAD. Before we opened these accounts, we withdrew money from ATMs with our US ATM cards, and seemed to get a good exchange rate, but paid our US bank's ATM fee. My Chase United miles credit card does not charge foreign transaction fees and seems to get good exchange rates. I read on gocurrycracker.com that these world travelers use a Fidelity ATM card because it refunds ATM fees.

I hope that helps, but others may have cleverer solutions.
« Last Edit: February 03, 2015, 05:49:43 AM by jodelino »

nereo

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #11 on: February 03, 2015, 09:19:57 AM »
I have a mortgage in Canada and moved a few thousand$ from the US to Canada to pay down the mortgage.  I got $1.254 on the exchange.
My logic was that I had the cash on hand and my 'term' resets next year, and I'd just as soon pay down a portion when the rates were down.

Also, it's made buying stuff in the US less automatic.  In 2011-2013 the cost of so many things in the US was cheaper, so i'd stock up on non-perishables every time I crossed into the US, especially when considering the 15% sales tax in Quebec.  Now many things are starting to be much closer in price.

Goldielocks

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Re: Are you making any moves in response to the USD-CAD exchange rate shift?
« Reply #12 on: February 03, 2015, 10:22:06 AM »
With falling oil prices, the Canadian dollar keeps falling relative to the US dollar.

I'm a US citizen who spends a lot of time in Canada and plans to spend more time there post-retirement. I've been stashing some USD in my Canadian account a bit at a time, as the CAD has dropped relative to the USD over the past year.

I've also started buying some Canadian bank stocks, which have dipped in price this year, but which pay a good dividend and have good long histories. They seem like maybe a better deal than US stocks right now. I haven't ventured into any other kinds of Canadian stocks.

Are any of you--Canadian or US citizens--making moves in response to the shifts in the USD-CAD exchange rate?

Any predictions as to how far the CAD will fall relative to the USD?

Any recommendations?

(US citizens planning a vacation--this is a good year to go north!).

Many think that the Canadian housing market looks a heck of a lot like the US market in 2007 (and with good reason). The crash is oil prices could easily be the pin prick that pops the bubble.

How did US banks fare post real estate crash? That should give you an indication as to why Canadian bank stocks are selling off.  Real estate is a confidence game, and sentiment is turning rapidly south north of the border.
Except the overheated markets of vcr and Toronto have little to do with oil companies.