Three charts you may have missed while watching oil

Ryan M Jan 21, 2015


Canadian Dollar: The first chart of the CAD relative to USD with WTI prices overlain is an interesting one for three reasons:

1)   It shows that the current exchange rate is not far off from longer-term averages. When we consider the Canadian dollar over a shorter period, the current rate looks extraordinary but taking a longer-term point of view shows that it may just be getting back to more normalized levels.

2)   While we think calling the CAD a ‘petrodollar’ is likely an oversimplification, there does appear to be some merit to the argument at least since 2003.

3)   This may be a mere coincidence but if we follow the price of oil (purple line) back to when it was a similar price in the past, the CAD was essentially at the same level.



Swiss Franc: Many Canadians may have overlooked this second chart as it paralleled news of Target exiting Canada. It shows the movement of the Swiss Franc after the announcement that the currency peg was being removed. We have overlain an FX trading company (FXCM) to show the devastation that big currency moves can cause, and again why we just would not bother trading currencies.


Gold Miners: Finally, gold miners look to be on the move, with the gold miner ETF XGD up over 24% year-to-date. Not many were expecting a move like that from one of the most hated asset classes currently, which is why we continue to prefer holding a diversified portfolio, opposed to jumping in and out of assets.



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