The stock market turmoil continues this week with wild swings in Dow Jones Industrial Average becoming a daily event.
The CBOE Volatility Index went above 80 points this week, a sign of the fear that is gripping the market.
The current story in the market is oil price will not be able to stage a recovery since the global economy is slowing and demand of oil will drop. Next week we will see the OPEC meeting to discuss whether to cut oil production to stop the slide in oil price.
A direct impact of oil price decline is reflected in the Canadian currency. The USDCAD pair has been on an up move since early October. The USDCAD pair moved into “Bullish” phase on 30 Sep 08.
By being long in this trade, you are betting that USD will rise and CAD will fall. This scenario fits the current story in the market that USD will strengthen and as economy slows down, oil price will drop.
The CBOE Volatility Index went above 80 points this week, a sign of the fear that is gripping the market.
The current story in the market is oil price will not be able to stage a recovery since the global economy is slowing and demand of oil will drop. Next week we will see the OPEC meeting to discuss whether to cut oil production to stop the slide in oil price.
A direct impact of oil price decline is reflected in the Canadian currency. The USDCAD pair has been on an up move since early October. The USDCAD pair moved into “Bullish” phase on 30 Sep 08.
By being long in this trade, you are betting that USD will rise and CAD will fall. This scenario fits the current story in the market that USD will strengthen and as economy slows down, oil price will drop.
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