The US dollar starts the shortened week roughly where it ended last week but that is only after losing ground against the Canadian dollar over the long weekend and then clawing back those losses this morning. The overall picture in the markets is unchanged and remains bullish, even euphoric to some extent. All asset classes are trading up and most are at record levels. Everything ranging from stocks to bitcoins to treasuries to real estate seems to be reflecting both a positive mood and a recognition that the massive amount of monetary stimulus, to be soon accompanied with a huge US fiscal package, will drive up asset prices for a while. And that brings us to Canadian real estate where housing starts in January blew away expectations and prices were up a whopping 2% in one month and a healthy 13% year over year. Also, interesting to point out in economic data is that Canadian purchases of foreign securities reached a record level in December, largely focused on US stocks while foreign investment in Canadian debt securities in 2020 reached a record level. All of this points to one thing; there is a lot of cheap money to go around, in Canada and around the world, and how it sloshes around will ultimately be a big factor in the USD to CAD exchange rate.
