Wednesday, October 22, 2008

Currency Comparison

If the American economy is doing so bad and the Canadian economy is so stable then how would an economist explain this:

Note that against both the Canadian Dollar and against the Euro, the American Dollar is climbing at a significant rate. I find this very interesting but have heard no compelling evidence to explain it.

1 comment:

hms victory said...

Oh dear...where to begin...anything from...

-Worldwide hedge fund de-leveraging (especially shown with the fall of oil price)

-Un-widening of yen carry-trade (check USD/JPY exchange rate)

-Capital flight to perceived safe haven of US Treasury bonds from riskier holdings or in desperate attempt at getting yield
(check US T-bond prices/yield)

-Intervention of governments and/or central banks (maybe, maybe not, depends on your perception of reality)

That should get you started!