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Archive for 20. August 2009

Good time to short the U.S. dollar against the loonie

 It is a good time to short the U.S. dollar versus the Canadian currency, given its ties to oil prices that have moved back toward the top of a recent trading range, Goldman Sachs said on Thursday.”This U.S. dollar view could have been expressed against a number of currencies but the Canadian dollar looks particularly attractive given its strong exposure to oil,” Goldman Sachs wrote in a note. “Combined with our underlying bullish oil view linked to supply fundamentals, the risks are likely skewed towards CAD outperformance.”

Read full story here.

How Important is China to World Stock Markets?

As the fasted growing economy in the world China is important but one must keep some perspective. China accounts for only 1.48% of FTSE All World Index, a measure of global stock market capitalization. The United States is still the 100 pound gorilla accounting for 41% and the rest of the world ex China and the US 57.52%.

The other thing to keep in mind on the Chinese stock market is that it, for all intensive purposes, is closed to the rest of the world. Domestic trading fuels the Chinese market giving a casino like atmosphere where high volatility is the order of the day.

So does China matter. Sure but if China sneezes it does not mean the rest of the world will catch a cold.

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