{"id":444663,"date":"2010-03-18T11:26:00","date_gmt":"2010-03-18T15:26:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:409489"},"modified":"2010-03-18T11:26:00","modified_gmt":"2010-03-18T15:26:00","slug":"loonie-ripe-for-a-correction-rosenberg","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/444663","title":{"rendered":"Loonie ripe for a correction: Rosenberg"},"content":{"rendered":"

\"\"<\/a><\/p>\n

The Canadian dollar is overvalued by at least six cents, according to David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates. With net speculative long positions for the loonie at their second highest level<\/a> on record, he suggested that the currency is ripe for a correction.<\/p>\n

The last time the loonie\u2019s net long position was this high was back in November 2007, according to U.S. Commodity Futures Trading Commission data. In the following month, the Canadian dollar suffered a 9.5% decline.<\/p>\n

Mr. Rosenberg also noted that the loonie\u2019s momentum, as measured by its year-over-year percentage change, reveals that it is \u201chugely overbought.\u201d<\/p>\n

\u201cThere has always been a round of profit-taking at these momentum levels in the past,\u201d the strategist said in a note. He added that other commodity-sensitive currencies such as the Australian and New Zealand dollars are far less loved by speculators.<\/p>\n

So while Mr. Rosenberg loves the loonie on a long-term basis \u2013 the fair value line is rising a couple of cents each year, serving to show how Canada\u2019s fundamentals are improving relative to the United States \u2013 its ascent leaves the bulls with a conundrum.<\/p>\n

For now, given that the loonie is front page news \u201cjust about everywhere,\u201d the strategist says most, if not all, of the good news is already in the price.<\/p>\n

On a technical basis, he noted that the Canadian dollar could trade all the way back down to 93\u00a2 without violating any of the constructive intermediate and long-term trend lines.<\/p>\n

Jonathan Ratner<\/a> <\/p>\n

Photo: David Rosenberg of Gluskin Sheff and Associates Inc., in Toronto, Monday, May 25, 2009. (Photo By Peter J. Thompson\/National Post)<\/i><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The Canadian dollar is overvalued by at least six cents, according to David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates. With net speculative long positions for the loonie at their second highest level on record, he suggested that the currency is ripe for a correction. The last time the loonie\u2019s net long […]<\/p>\n","protected":false},"author":4059,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-444663","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/444663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4059"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=444663"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/444663\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=444663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=444663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=444663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}