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US/Canadian Dollar


stupe
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The U.S. has signaled an end to Quantitative Easing and because of economic strength (or at least the prettiest girl in an international ugly girl pageant) plans to raise interest rates in 2015. International money then flows to the USD making it stronger currency. On the other hand, Canadas economy is largely resources related and the recent drop in oil prices is having a negative impact on oil sands business as US fracking is more profitable at these and lower oil levels. Last week, the Canadian Govt, due to this weakness, surprised markets and CUT interest rates and the belief is there maybe more cuts which lowers the attractiveness of Canadian dollar. My expectation is we see 1.30-1.40 exchange rate by December 2015 and 1.50 in 2016. Yes I do this for a living.

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WOW..... Good info. I have been working for a man that deals with a lot of different financial institutions and he said pretty much the same thing. The conversation came up when I was telling him about our upcoming trip.

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Yes this year is less expensive for Americans to visit Quebec not only due to the favorable exchange rate but also the decrease in the price per liter of gas.

When the rate gets back to 1.50, I will hedge out the exposure and convert 4-5 years worth of sled trip costs equivalent at that time. If rates go back to 1:1, then I'm the only smart one in the room "still" getting 1.50. Obviously, you have to have the cash to do that, but it pays for itself if you're like me and go to QC every year.

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