In a very holiday-light market, two stories emerged with currency market ramifications. First, Canada’s finance minister, Jim Flaherty, opined that China and Russia may be purchasing the Canadian currency in their efforts to diversify away from their massive U.S. dollar holdings. We are not big fans of Mr. Flaherty as he has the proclivity of making ill-timed announcements. Flaherty’s statement in a very thin market will have the very effects he has been trying to prevent: rapid LOONIE appreciation.
Second, the Swiss franc has found willing buyers as there are rumors that Glencore, the world’s large natural resource producer and trader, is moving to do a long-awaited IPO. Glencore has moved to sell $2.2 billion of convertible bonds to Blackrock in what Bloomberg reports will be the first step to an IPO. The euro/Swiss cross has approached levels where the Swiss National Bank intervened earlier in the year. We will watch to see if the SNB shows up after this Glencore news is digested. Also, we remind everyone that Glencore is a Swiss-based concern, since Marc Rich founded the company.
We also include a link to our CNBC appearance this morning with a chance to question Professor Ken Rogoff.
Trading Block: Currencies & Commodities – CNBC.com.
Tags: Loonie, Swiss Franc
December 23, 2009 at 6:09 pm |
thx
I was wondering why the swiss was bid vs euro in and up mkt