The Bank of Canada raised the overnight interest rate again on September 6th by 25bps to 1.00%.  As a result the 2 year and the 5 year GoC bond yields are higher than that of the equivalent US Treasury yields and year to date the Canadian dollar is up over 10% vis a vis the USD.  To get an idea of the impact this has on a portfolio, if we look at the S&P 500 (a basket of US stocks) we see that year to date it is up 11.3%.  However in Canadian dollar terms the same index is up only 1.1%.  What a difference currency fluctuations can make!  In order to protect our portfolios we hedge a portion of our US holdings so that currency movements do not impact our returns.  The next Bank of Canada announcement will be on October 25th so we will watch with interest.