Max,this could eventually effect gold prices,IMO-if Canadian Gov. comes into the market to buy(replace) gold..Also note the Gov. was selling gold reserves in August..
"$5.8 billion spent defending loony
during August
ERIC BEAUCHESNE
Southam News
The Bank of Canada spent a record $5.8 billion U.S., more than
one-quarter of its official international reserves, vainly trying to
defend the loony in August before throwing in the towel at
month's end and raising interest rates to rescue the currency.
The dollar, which was worth more than 66 cents U.S. at the start
of August, was threatening to slide below 63 cents U.S. when the
bank finally raised rates a full percentage point to make the
currency more attractive to investors and ward off speculators.
The dollar closed yesterday at 65 cents U.S., up from 64.83
cents U.S. This week has marked its strongest rally in a decade,
although it started from its lowest level ever.
The recovery in the currency is being attributed mostly to an
improvement in commodity prices, rather than the interest-rate
increase or the record purchases of loonies by the central bank.
The spending of foreign currencies and the sale of 128,000
ounces of gold to buy and buoy devalued loonies cut the
government's holdings of gold and foreign currencies to an
eight-month low of $17.965 billion U.S.
That nearly $6-billion defence is the heaviest monthly
intervention to date, exceeding the previous record of $4.3 billion
U.S. in September 1992. The bank intervened on behalf of the
loony on 13 of 20 business days last month.
Also eating into the reserves last month was a loan of $361
million U.S. to Thailand, Canada's share of an international
bailout package for the Asian country where the global financial
turmoil originated.
In disclosing the figures, the Finance Department said "Canada
retains a strong reserve position" but also said it will be increasing
the level of reserves to better protect the dollar, which has been
battered by the "increased flows and volatility in
foreign-exchange markets."
See ya,DD
PS: it amazes me how many different ways the Canadians spell the name of their currency. I have read in major Can. newspapers, loonie,loony,and looney<vbg>
PSS: did a couple of calculations,last week my Canadian portfolio gained an additional 2.4%(in US dollars) due to the increased value of the C-dollar..Every penny increase equates to a 1% gain in value....gotta love it<g>.
PSSS: going to start stupying AVCORP AVP.to
They are very similar to CADE and Richard Lund( CADE bigdog) even sits on the board of AVP,things that make you go hmmmmmmmmmmmm. |
