Is the torch being passed to a new generation of currencies? Are the Chinese putting together their own SDR-like currency basket? It is hard to know just yet but it certainly seems as though the mighty are falling, at least temporarily, while the second-tier are now in demand.
CAD is on a tear today amid talk of accumulation of the Loonie as a reserve currency. Same story for AUD and GBP. Sterling I can understand because it is rebounding from heavily oversold levels. CAD and AUD are more bets that the emerging markets will lead the global economy out of recession and resource-rich countries like Australian and Canada will be major beneficiaries. As readers know, I’m skeptical of that notion, to the extreme.
There ‘s a first time for everything and maybe this will be the first time the developing world leads the developed world back toward growth. And monkeys might fly out of my butt.
[youtube]http://www.youtube.com/watch?v=2aQi2rRayS4[/youtube]
USD/CAD has fallen as low as 1.2030 and trades now at 1.2045. Cable is consolidating just below the 1.5000 level. AUD is back above 0.72, now at 0.7225.
