wmeubank@ocp.kcmo.com
COMMODITY INSIGHT
152 Ennis Lake Road, Ennis, Montana
(October 12, 1997) CURRENCIES: I have been concentrating on the Canadian Dollar from the long side. My work suggests that is undervalued and headed higher.
The Bank of Canada has been pushing rates higher in an attempt to fight inflation. Higher rates should underpin the Canadian Dollar. But this week, that strategy failed to do much good as the Canuck fell to a two-week low, 63 points off the high it set on October, 3. The Canuck simply cannot handle good news.
And markets that go down on good news are markets that are in trouble. I wish to buy the Canadian Dollar on this break. But with prices so sloppy following another hike in Canadian rates, I will watch the Canuck for another week rather than trade it.
Jerry F. Welch
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