Part three in a series of magnanimous gestures in which Goldman Sachs tries to teach you dullards how to trade like Goldman Sachs. Today's installment: Canadian Thanksgiving was weeks ago, so fuck those guys.
“Sell the Canadian dollar…”
Canada’s current account position has been in deficit for about the last five years, mostly due to a decline in manufacturing exports (which it says tanked by 30% during the crisis). At the start, that deficit was easily funded. A strong banking sector made the Canadian dollar a haven for investors. Those inflows helped keep its balance of payments relatively strong. But that’s changed in 2013.
“Over the past few quarters, capital inflows have slowed rapidly, pushing the broad balance of payments into deficit of about 1% of GDP currently. Slowing reserve diversification [into the Canadian dollar] has almost certainly contributed to this,” Goldman wrote. Without those inflows, the deficit becomes harder to fund.
Real Thanksgiving is tomorrow, and since even Goldman's biggest fan rested for a day, so shall they.
Goldman Sachs Trading Idea #3: Sell This Currency [WSJ MoneyBeat blog]