Moving USD/CAD funds and the implication of capital gains taxation
Hello, US Citizen living and working in Ontario. I have both a Canadian bank account and my original US bank account that I still use when I'm travelling/spending money in the US. I'd like to replenish my US-based bank account with more funds using Transferwise if the power of the loonie increases against USD. But I don't want to bother with that if I need to pay a capital gains tax on it. When does/doesn't moving CAD between USD count as an 'investment'? I have noticed the big banks here in Canada often offer chequing/savings accounts in US dollar funds. Has anyone used these? I presume you move your CAD from your primary account to the USD account. But, what if you move the funds back from the USD account to CAD? Does Capital Gains taxation apply here? tl;dr: When does converting currency get considered as FOREX trading? Where's the line drawn?
Hi everyone! I'm not a forex trader but I wanted to ask you old hands how you see the Canadian buck performing. I ultimately want to end up in CAD to buy a house in a years time. I presently hold USD and wanted to get a general feeling from you guys if now is a good time to swap into CAD, or do I wait? USDCAD presently at 1.41. To me, it seems the Fed will print the balls off the USD into a less valuable currency, although even with all this printing the DXY is presently holding over 100pts. So I dont know 🤷🏻♂️ Looking at QE1-3 in 2008-9, the CAD strengthens against the USD. Is this going to happen again? Alternatively, I open my browser and find this in my feed: https://www.bloomberg.com/amp/news/articles/2020-04-24/canada-headed-for-60-cent-loonie-and-downgrades-rosenberg-says What's a guy to do!? Thanks!
This is the best tl;dr I could make, original reduced by 69%. (I'm a bot)
Across mainland China there were 2,015 new confirmed infections as of Tuesday, the lowest daily rise since Jan. 30. The Australian dollar, sensitive to China's fortunes because of Australia's commodity-driven export profile, firmed 0.3% to $0.6728 AUD=D3. Oil prices, a barometer of global energy demand and so of growth, remain nearly a fifth lower than they were before the outbreak. The currencies of oil exporters such as Canada and Norway have been hammered, with the krone NOK= shedding 5% this year and the loonie CAD=D3 hitting a four-month low on Monday. "The main impact of coronavirus for Europe is growth," said Steve Englander, head of global G10 FX research at Standard Chartered. "The euro area started the year with low growth and an ECB largely out of policy options...(a) bad scenario could see an extension of recent moves and EUUSD may head towards the $1.04/05 lows of the European debt crisis."
My experience with Norbit's Gambit [google sheets link included]
Just want to share my experience doing Norbit's Gambit, for anyone that may want to learn on my experience, or tell me all the ways in which I am wrong. I've posted a question earlier, asking how to make sure the market didn't swing in the wrong direction. And yes, I understand it's called a "gambit" for a reason. === TL;DR === - Wanted to save $65 on currency conversion while buying CAD $3,500 worth of US stock - Overestimated forex fee, underestimated NG cost - Murphy happened... - Lost potential gains of CAD $185.80 while waiting - Is the gambit ever worth it? === The goal === - On August 25th, use about CAD $3,500 to buy some US Netflix (NFLX) shares === The method === - Buy DLR in CAD - Call brokerage to journal over to US side - Sell DLR.U in USD - Buy NFLX with USD In a lot of my research, I've been told the "fee" when going through the brokerage (Questrade in my case) is 2%. That's not too accurate. === The brokerage Forex rate/fee === So I assumed 2% of $3,500 would be $70. However it's really an addition of 199 basis points to the exchange rate. I believe they use the closing exchange rate on the date of the transaction. So if the exchange was 1.2500, it's 1.2699, and $CAD 1000 nets $USD 787.46 ($USD 12.54 short of ideal $USD 800). If we convert 12.54 to CAD, it's $CAD 15.68 or 1.568% on the original $CAD 1000. But if the exchange is 1.2200, it's 1.2399, and $CAD 1000 nets $USD 806.51 ($USD 13.16 short of ideal $USD 819.67). If we convert 13.16 to CAD, it's $CAD 16.06 of 1.606% of the original $CAD 1000 The "conversion fee" is dependent on the exchange rate, but I can't figure out a quick direct way to calculate what the "fee" would be in source currency %. The closest guesstimate is to divide the basis points by the current exchange rate, as below:
In first example, 0.0199 / 1.25 = 0.0159 or 1.59%
In second example, 0.0199 / 1.22 = 0.0163 or 1.63%
On August 25th, the exchange rate was 1.2483. So the above guesstimate for the Forex "fee" would be $55.80. Or more accurately $54.91, close enough. Still, that's 21.5% lower than the broad *$70** estimate earlier.* === The NG effective fee === Here once again, the common consensus is that the NG's fee is just a cost of buying and selling an ETF. So, with QT's free ETF purchases, the guesstimate is just about $5 for the selling commission. When I bought DLR ETF on August 25th, I got it for CAD $12.42 per share (that's not the day's close price, but what I actually paid). the US side of DLR.U is always US $9.93. The gives the DLR Exchange Rate of 1.2508... already different from the ideal 1.2483 (I suppose that's how the ETF makes money)
CAD $3,502.44 buys 282 whole shares of DLR (I will address the extra $2.44 later)
No buying comm, but ECN of CAD $0.0035 * 282 = $0.99
Selling comm and ECN: US $0.99 + $4.95 = $5.94
So, it would appear the cost/fee of NG is just CAD $0.99 + US $5.94 (CAD $8.40)... but not quite. Let's look as the actual US dollar amounts. Since we can only buy whole shares of DLR + ECN fee, from this point I am converting CAD $3,502.44 + $0.99 = $3,503.43
Ideally, with exchange of 1.2483, CAD $3,503.43 nets US $2,806.56
I paid CAD $3,503.43 to buy 282 DLR shares
I sold DLR @9.93 for US $2,800.26
Less US $5.94 comm+ENC leaves me with actual cash of US $2,794.32
The difference between the ideal US $amount and what I am left with is the "fee" for doing NG. US $12.24, or CAD $15.28. This sets the NG's Effective Exchange Rate as 1.2538 or a "NG's fee" of 0.44%. Please note that this rate/fee is *based on the converted amount*: the more you convert, the less/cheaper it is. So comparing the actual cost of NG vs QT's auto conversion and the guesstimates is quite different - Actual $15.28 vs $54.91 ($39.63 spread) - Guesstimate $5 vs $70 ($65 spread) === The Time factor === Now that I have US $2,794.32, let's buy some NFLX. The date now is Sept 5th (yes, the NG completed earlier, but I am human... also QT didn't call me when the journaling was completed so I got sidetracked). Before doing the NG, I calculated that NFLX dropped about 2.02% in 10 days. It could also go up by same amount. That 2.02% rise on CAD $3,500 value would be a gain of $70.7... comparable to $65 guesstimate loss of doing currency auto-conversion through QT (QTAC). So in my analysis, at worth case it would be a wash, in best case I save some money on NG. ... We already know now that the actual cost of QTAC is much less ....
On September 5th, NFLX traded (at time of my purchase) at $178.79
That's a 6.74% increase of August 25th's price of $167.50 (at the time of me recording the price)
US $2,794.32 buys 15 whole shares for $2,681.85 + $4.95 Comm = US $2,686.80 spent. [Weirdly enough I had no US ECN fees in spite of doing odd lot market orders]
This leaves US $107.52 in cash
Total US Portfolio value (cash + NFLX value) $107.52 + $2,681.85 = $2,789.37
This was the end result of my NG: spent CAD $3,503.43 and 11 days later I have a US stock+cash Portfolio of value US $2,789.37 But considering the increase in NFLX stock over those 11 days, what if I would have just went with Questrade's Auto-conversion (QTAC) route?
QTAC exchange rate on August 25th, 1.2483 + 0.0199 = 1.2682
CAD $3,503.43 will net US $2,762.52
That would buy 16 whole NFLX shares @167.50 for US $2,680 + $4.95 comm
Total spent US $2,684.95 and left with $77.57 cash
Cash + NFLX Portfolio value US $2,757.57
In 11 days, the value of NFLX is @178.79 - Current value of 16 NFLX shares = US $2,860.64 - Plus cash US $77.57 for a Total Portfolio Value of US $2,938.21 If, on August 25th, I would have auto converted currency with QT and bought NFLX, I would have a portfolio value of US $2,938.21 on September 5th. Instead, starting the Norbit's Gambit on August 25th, I bought NFLX on Sept 5th and have a portfolio value of US $2,789.37 Instead of saving a guesstimate of CAD $65, I have lost potential gains of US $148.84 or CAD $185.80 === Murphy... or Loonie... whatever === In all of above, I tried to keep the currency fluctuations isolated. So apart from initial conversion on August 25th, all my future (September 5th) portfolio values were in USD. But as Murphy would have it, the BoC rate announcement made the loonie stronger in between my NG.
On September 5th, the ideal exchange rate jumped to 1.2235
DLDLR.U had a somewhat delayed reaction, and was almost same at 1.2236
Based on above, doing QT auto-conversion - On August 25th, nets US $2,762.52 - On September 5th, nets US $2,817.62 I would have got US $55.10 more just by doing the QTAC later. If I would have bought NFLX on September 5th after doing QTAC - 15 whole shares @178.79 + $4.95 comm leaves me with US $130.82 in cash - Total NFLX + Cash portfolio value of US $2,812.67 That's still US $23.30 more than doing the NG, although still less than just buying NFLX outright on August 25th and letting it grow. === Final conclusion === Smaller amount (CAD $3,500) for NG for a stock purchase that could/did swing 6% was not worth it. Loonie getting stronger also made the whole exercise fruitless, but even eliminating the currency fluctuation, the growth of the stock outperformed the savings of NG. Playing with my numbers, assuming the currency fluctuation is fixed, for CAD $3,500, doing Norbit's Gambit vs Questrade's Auto-Conversion is breaking even when the stock appreciation is no more than 1.18% during the time it takes to complete NG (11 days in my case). Even if you are more punctual and can complete it in 5 days, you still need to make sure the stock doesn't appreciate more than 1.18% in 5 days. By comparison, if converting CAD $10,000, it's break even if stock rises 1.27% during that time. When doing CAD $50,000 then 1.31% Hmm.... so even at high amounts of CAD $50,000 the tolerance to stock fluctuation is pretty low. So is it worth it? Ultimately I've:
Hey guys, I recently finished the BabyPips course on Forex and have a general understanding of trading, but now that I want to delve into a specific currency pair (USD/CAD) I feel lost in terms to what use in my analysis. Obviously, the loonie is largely affected by oil prices but I'm still not entirely sure which oil indices (because there are several) or other Canada-specific metrics I should be looking (besides the universal things like unemployment, central bank announcements, etc). Could someone please point me in the right direction for this currency pair? Any help is greatly appreciated.
currency pairs and correlation - how do you trade?
fellow forex traders i am curious about how you guys put together the list of currency pairs you are watching? especially if currency pair correlation play a role to you? for example if you have the eurusd in your list do you also have the gbpusd? these pairs are positively correlated at about 90%. see link: http://www.myfxbook.com/forex-market/correlation/EURUSD if you take correlation into consideration at what percentage would you think that correlation is no longer important? at 80%? 70%? i understand it would be to prefer to trade the eurusd as it has more liquidity and not trade both at same time as you expose yourself to the same risk in two trades. i am a newbie so still in the process of finalizing my list. recently became aware of the correlations between some pairs and was thinking about which ones to exclude. this is my list: Major Currencies: Symbol Name Nickname EURO/USD Euro-Dollar Euro USD/JPY Dollar-Yen Yen GBP/USD Sterling-Dollar Sterling USD/CHF Dollar-Swiss Swissy AUD/USD Austrialian-Dollar Aussie USD/CAD Dollar-Canada Loonie NZD/USD New Zealand-Dollar Kiwi Cross Currencies: Symbol Name Nickname EURO/GDP Euro-Sterling Chunnel EURO/CHF Euro-Swiss Chief EURO/JPY Euro-Yen Yuppy
AUD/CAD Technical Analysis. Potential for a long term set up.
AUD/CAD's recently caught my attention, for a few reasons. Going to attempt some fundies, and then look at some tech for setups. The Loonie
CAD has taken a thrashing in the last few months, making it the standout in terms of low correlation with just about anything. This is due mostly to Mark Carney's departure and the BOC changing its stance on interest rates from hawkish to neutral. This selling might be overdone.
This breakdown in correlation is a symptom of a much larger issue - the divorce of price action from risk trends. The weakening in CAD is mostly a result of large funds and corporates deleveraging, and getting rid of their Loonies as quickly as possible to avoid fallout from the above.
The Loonie is, however, correlated with oil prices
USOil, D1 http://i.imgur.com/AIUxB3f.png Looks pretty bullish to me. Any serious crisis could spark a lot of volatility, pushing price through the 110 ceiling. It's unlikely, granted, but it's difficult to see a drastic fall in oil demand any time soon. On the other hand, we have the Australian dollar
I'm very bearish, but I know the selling is overdone.
AUD/USD has lost a lot of its correlation with Gold lately, but it still correlates reasonably well to any decent commodities index:
https://www.tradingview.com/x/m6y9Vz7b/ That's not a great chart, but you can clearly see what's happening there. Generally in a downward trending range, which looks rather overbought at the moment. A break to the upside would be extremely bullish for the Aussie, but that's not very likely given rumours of slowing demand from China and a declining gold price. I know there are a few gold bugs lurking in this sub who are going to argue with me, but I'm pretty bearish on Gold as well.
So in a nutshell my bias could be summed up as neutral to bullish CAD, neutral to bearish AUD. Here's the AUD/CAD daily: http://i.imgur.com/y5acVLB.png The top pink rectangle is an absolutely pivotal supply/demand area that has long since been breached. We're currently within a downward channel (much cleaner than AUD/USD's) after failing above the 50% retracement of the year's decline and an attempt to clear this zone. The orange line is the 100 Month moving average, but don't get too excited - it hasn't done a great job of providing major support or resistance for as long as I have chart data. The current channel, if it continues, will bring us very neatly to the rising line connecting the July 2010 and July 2013 lows, as well as a strong demand area, and roughly the 0.382 retracement of the move from 2010 to 2013. This area is the last chance for bulls. At the point marked with a green circle on my chart I'll be watching price action very carefully. It might take a few days to play out, or it could happen very quickly, but price will probably give us an indication of where it will be heading in 2014 if it gets to that level. There are two trades:
A bounce. I prefer this from a technical perspective, but it doesn't align with my fundamental bias. I'll trade what I see though and if a spike low is formed around this area I will enter long with a stop below that spike, and targeting 0.9700, parity and 1.0500.
A break of the 0.9250 area and retest and failure at this level opens up a lot of downside targets - noted in green as fibonacci extensions. If this happens, the challenge will be judging if there is sufficient volatility to give the move continuation, and finding a suitable level to trade against. Downside targets are 0.900, 0.8800 and 0.8600
USD/CAD: Retail trader data shows 54.34% of traders are net-long with the ratio of traders long to short at 1.19 to 1. The number of traders net-long is 6.76% lower than yesterday and 3.06% lower ... USD/CAD Forecast: Stabilizes Against Loonie; USD/CAD Forecast: Stabilizes Against Loonie. Christopher Lewis on October 05, 2020 Latest News. EUR/USD Forecast: Struggling with Massive Resistance . 11 hours ago Christopher Lewis Technical Analysis NASDAQ 100 Forecast: At the Top of a Range. 11 hours ago Christopher Lewis Technical Analysis S&P 500 Forecast: Heading Towards Highs . 11 hours ago ... USD/CAD forecast. The USD to CAD trend has begun to fall in recent weeks as global investors become more optimistic about a shift towards recovery from the economic turmoil caused by the coronavirus pandemic.. Oil markets, while still significantly lower than the start of 2020, have stabilised and this has positively impacted the CAD. USD/CAD: Loonie crushed by oil – NBF NEWS Apr 06, 13:27 GMT By FXStreet Team. The Canadian dollar lost 6% against the USD in March, its worst monthly performance in five years. Granted, the ... USD/CAD: Loonie has fundamental supports – CitiBank 0. By FX Street Published: Oct 13, 2020 17:07 GMT Last Modified: Oct 13, 2020 19:07 GMT FXStreet News. Analysts at Citibank continue to look for the WTI barrel to reach $50 by year-end and $60 in 2021 in their base case; such a scenario would favor the Canadian dollar. They forecast USD/CAD at 1.30 in 0-3 months and at 1.27 in 6-12 months ... USD/CAD is the forex ticker that represents the US Dollar-Canadian Dollar currency pair. The USD/CAD rate, as indicated on the live chart, shows traders how many Canadian Dollars are required to ... Economies.com provides the latest News about the USD/CAD (US Dollar/Canadian Dollar or Loonie). You may find the News on a daily basis with an indication for the daily trend. You may also find live updates around the clock if any major changes occur in the currency pair. List of content. Forex Rates: Forex News: Technical Analysis: USD/CAD Price . Convert USD/CAD . Technical Analysis . News ...
What to Expect from USD/CAD and Other Loonie Pairs with BoC Expected to Hike (Strategy Video)
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