FX Outlook

Over the last few years, gold and oil prices have tended to move together.

Reading our papers and looking at our markets, it is hard to be anything but gloomy. We now have irrefutable evidence that the new administration does not have a magic wand. If anything, they seem to be afflicted with the same communication challenges as the previous administration.

We are a little more than one month in to 2009. Since the New Year, some things have changed: the United States has a new president

Since the U.S. dollar began rallying last summer, opinions on its future prospects against most currencies have ranged from extreme bullishness to extreme bearishness. However, many forecasters have been consistently negative on the Canadian dollar (CAD) or the "loonie" as it is sometimes called.

Tomorrow will not be better for the UK, according to Jim Rogers, Chairman of Rogers Holdings and co-founder of the Quantum Fund.

Just when we thought our economy was in a shambles, along comes Europe to bring us cheer. Could it be that we are not the Biggest Loser?

As my colleague Fernand Kong mentioned in last month's FX Outlook, the USD recovery in the latter half of 2008 was the result of the near collapse of the global financial system.

Everyone knows the broader story for commodity prices in 2008; it was a tale of two wildly differing six-month periods. For the first half of the year virtually every commodity soared in value; after July 4, there was a collective nosedive.

Many corporations tend to use forwards to hedge their currency exposures - pricing is relatively transparent, the accounting simple and most finance staff are comfortable with them.

The parallels are many and they are disturbing. Japan's problems started with a sharp decline in Japanese stocks in 1989.