Forex Blog: Currency Trading News & Analysis.

March 2nd 2005

Canada suffers capital outflow

The Canadian Dollar has been losing ground to the USD of late, as Canadians are rushing to invest in foreign capital markets. Canadian law previously forbade pension funds from investing more than 30% of their assets in foreign securities. After the rule was scrapped, Canadian pension funds rushed to invest capital in foreign (US) debt and equity markets, which caused the Canadian Dollar to depreciate. Nonetheless, most experts remain bullish on their CAD forecasts. Rising commodity prices and a loosening of foreign ownership restrictions, will more than offset the outflow of CAD. BMO Nesbitt Burns reports:

For instance, 2004 saw portfolio capital inflows of $53.2 billion into Canada compared with a mere $16.2 billion outflow from domestic investors.

Read More: Greenback Treading Water

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Posted by Adam Kritzer | in Exotic Currencies | No Comments »

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