How about that dollar huh?

October 19, 2022 | Jeremy Goldfarb


The US dollar (that's the one I was talking about in the title) has been on a meteoric tear, during the back half of this year. I though it appropriate to include the latest installment of the George Davis Report. George is the Chief Technical Strategist, Fixed Income, Currencies & Commodities, for RBC Capital Markets, and he puts out a monthly video series on the trajectory of the Canadian dollar. I invite you to listen by clicking this link.


Something to think about as a Canadian investor, whether you are new to the market, or a seasoned veteran. 


imagine the following:

You look at the market, and figure that valuations have been beaten down on a number of US much so, that the entry point is appealing to you. Pick a fictional company ABC computing Inc, that is trading 20% off of its high, and all metrics are pointed to it breaking out.

  • You convert your cash to USD from CAD, make the investment, and a year later, the stock is up 20%. Amazing right!? 
  • In the meantime, the US fed has reversed course, and decided to loosen policy again, which sees the USD lose 18% of its value (relative to the CAD) over the next 12 months. 

The impact of currency on investing cannot be dismissed, especially in times of great volatility. I am not saying that the USD will reverse course against the CAD in the near future, or even at all. The recent run may continue, stabilize, or reverse course. My point is; one should pay attention to the state of currency when investing globally, and factor (at least a part of ) that into the decision making process. Considering where the USD/CAD relationship was, compared to where it is today, perhaps keep an eye on this relationship for the time being. 


If you are curious about this, click on the report, and feel free to call us to discuss more.