Earn Daily Interest While in this Currency Investment
Earn Daily Interest While in this Currency Investment
However, the AUD/CAD currency pair (Australia vs. Canada) can boast just that.
The downtrend (red line) has been broken. A spike low was put in place back in October and the price hasn’t looked back ever since. How many investments can say that? Most stocks, mutual funds and ETFs sure can’t right now!
Yet in stocks, at best you normally earn QUARTERLY interest but in this currency pair, you earn it DAILY each day at 5pm EST.
What are the fundamental forces at work that have produced this uptrend?
Here’s why I believe the uptrend will continue overall. There are several factors but I will hone in on two very important ones right now: Interest rates and Quantitative Easing.
Why interest rates? Australia’s currency yields 3% a year right now while Canada just cut theirs today to 0.25%. Therefore, that 2.75% difference can be earned on a daily basis. That’s enticing to investors and will encourage them to buy the higher yielding currency and to sell the lower yielding one.
Think of it this way. If you had a savings account at your bank that earned 0.25% and across town there was a bank offering 3%, which bank would you be inclined to stick your savings into? Of course, the 3% one. Currency investors are no different.
So interest rates will favor the Aussie dollar over the Loonie (nick name for the Canadian dollar).
What the heck is Quantitative Easing? Even though this phrase sounds complicated, it’s actually very simple. It’s simply when a central bank prints a ton of money. In this case 125 billion Canadaian dollars (thus far).
The concept is simple. Anytime you make more of something, it’s value gets diminished because it’s so prevalent. However, the more rare something is, the more it tends to rise in value because it’s so scarce.
So when the Canadian central bank prints more dollars (aye!), it dilutes the the value of that money. This now bringsa about two very serious road blocks for the Canadian dollar. Interest rates don’t give you an incentive to hold Canadian dollars (CAD) when there are others out there that literally pay 12 times higher (3% vs. 0.25%)! Also, Australia has resisted emploring Quantitative Easing while Canada is embracing it.
Therefore, when one country purposefully “waters down” their currency and another does not, it only makes sense that the latter should rise against the former.
Now there are other economic factors too that favor Australia over Canada...however, I wanted to point out two that were so important that they alone could help to keep this uptrend intact.
Sean Hyman
Earn Daily Interest While in this Currency Investment - To learn more about this author, visit Sean Hyman's Website.
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As I go through my day as a currency trader/investor, I scan the long term charts to see what may be emerging. Today, I ran across a great way to earn some interest EVERY DAY and be in an investment that is headed higher. Not many investments in the world can boast that right now.
However, the AUD/CAD currency pair (Australia vs. Canada) can boast just that.
The downtrend (red line) has been broken. A spike low was put in place back in October and the price hasn’t looked back ever since. How many investments can say that? Most stocks, mutual funds and ETFs sure can’t right now!
Yet in stocks, at best you normally earn QUARTERLY interest but in this currency pair, you earn it DAILY each day at 5pm EST.
What are the fundamental forces at work that have produced this uptrend?
Here’s why I believe the uptrend will continue overall. There are several factors but I will hone in on two very important ones right now: Interest rates and Quantitative Easing.
Why interest rates? Australia’s currency yields 3% a year right now while Canada just cut theirs today to 0.25%. Therefore, that 2.75% difference can be earned on a daily basis. That’s enticing to investors and will encourage them to buy the higher yielding currency and to sell the lower yielding one.
Think of it this way. If you had a savings account at your bank that earned 0.25% and across town there was a bank offering 3%, which bank would you be inclined to stick your savings into? Of course, the 3% one. Currency investors are no different.
So interest rates will favor the Aussie dollar over the Loonie (nick name for the Canadian dollar).
What the heck is Quantitative Easing? Even though this phrase sounds complicated, it’s actually very simple. It’s simply when a central bank prints a ton of money. In this case 125 billion Canadaian dollars (thus far).
The concept is simple. Anytime you make more of something, it’s value gets diminished because it’s so prevalent. However, the more rare something is, the more it tends to rise in value because it’s so scarce.
So when the Canadian central bank prints more dollars (aye!), it dilutes the the value of that money. This now bringsa about two very serious road blocks for the Canadian dollar. Interest rates don’t give you an incentive to hold Canadian dollars (CAD) when there are others out there that literally pay 12 times higher (3% vs. 0.25%)! Also, Australia has resisted emploring Quantitative Easing while Canada is embracing it.
Therefore, when one country purposefully “waters down” their currency and another does not, it only makes sense that the latter should rise against the former.
Now there are other economic factors too that favor Australia over Canada...however, I wanted to point out two that were so important that they alone could help to keep this uptrend intact.
Sean Hyman
Earn Daily Interest While in this Currency Investment - To learn more about this author, visit Sean Hyman's Website.
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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