I was in Ottawa, Canada earlier on this year. What struck me the most (aside from the fresh air, and the fact that no one I met actually said “oot and aboot” instead of “out and about”) was the muted reaction to the World Economic crisis. The atmosphere didn’t have that heaviness to it. It seemed like they were fine, and were going to remain so…unless you count the suicidal bellhop at my hotel who tried to convince me that Ottawa was a cr*phole and that I needed to get out before the shadows got me.
This is relevant because today the Canada job report is out. They lost 82,000 jobs, against expectations of 46,000. Unemployment was also up considerably. It seems that Canada is making a late entry into the “we are screwed” category of countries. To be fair, Canada has had it’s fair share of bad news; these items just didn’t have the biggest impact on my Forex Trading.
I mentioned previously that the global economic environment has been a somewhat harsh classroom for people learning about Forex Trading. You want to keep things simple. You want to be able to draw conclusions from established correlations. Consequently, it has been easy to see Oil having a good day, and generally assume that the Canadian Dollar would have a good day as well. This correlation has served well on the USD/CAD Currency Pair, even in this Environment.
Throw in a really crappy national economy in Canada and this is ruined. Oil might have an up-day, stocks might do alright, but bad news out of Canada would mean it would be even less likely that it’s currency would rise as expected.
In other news, the Swiss National Bank started a Global Forex War! Well, not really. They caused the Swiss currency to lose value by selling their own currency. The Swiss Franc has been doing quite well this Economic Crisis. Having a strong currency in this climate is bad for business and trade…exports mainly. That’s why the US Treasury
Robot Secretary made comments about China earlier on this year. Low Value currency = Decent money from exports.
The issue here is that Switzerland is part of the European “Community”. Such an action was unexpected, even shocking, because it is blatantly selfish. The rest of the EU will be affected, and not necessarily in a positive way. Still, it’s all about Self-preservation. If, however, the rest of European Union decides to respond in kind…then it could get ugly. Bring on the war!
This highlights a key issue in Forex Trading. NEVER TAKE ANYTHING FOR GRANTED. Stay sharp. Always watch for the change that is coming. That way you won’t suffer too much when it happens.