Sean Hyman
Contributing Writer
instructor@mywealth.com
At the bottom of today’s article, I’ll show you how to get started, in the “step by step” videos.
As I go through my day as a currency trader/investor, I scan the long term charts to see what may be emerging. Today, I ran across a great way to earn some interest EVERY DAY and be in an investment that is headed higher. Not many investments in the world can boast that right now.
However, the AUD/CAD currency pair (Australia vs. Canada) can boast just that. Take a look at the chart below and you will see an uptrend where the pair started carving out new highs lately!
Take advantage of Aussie’s strength and Canada’s weakness while earning daily interest along the way!
So we can see that the downtrend (red line) has been broken. A spike low was put in place back in October and the price hasn’t looked back ever since. How many investments can say that? Most stocks, mutual funds and ETFs sure can’t right now!
Yet in stocks, at best you normally earn QUARTERLY interest but in this currency pair, you earn it DAILY each day at 5pm EST.
What are the fundamental forces at work that have produced this uptrend?
Here’s why I believe the uptrend will continue overall. There are several factors but I will hone in on two very important ones right now: Interest rates and Quantitative Easing
Why interest rates? Australia’s currency yields 3% a year right now while Canada just cut theirs today to 0.25%. Therefore, that 2.75% difference can be earned on a daily basis. That’s enticing to investors and will encourage them to buy the higher yielding currency and to sell the lower yielding one.
Think of it this way. If you had a savings account at your bank that earned 0.25% and across town there was a bank offering 3%, which bank would you be inclined to stick your savings into? Of course, the 3% one. Currency investors are no different.
So interest rates will favor the Aussie dollar over the Loonie (nick name for the Canadian dollar).
What the heck is Quantitative Easing? Even though this phrase sounds complicated, it’s actually very simple. It’s simply when a central bank prints a ton of money. In this case 125 billion Canadaian dollars (thus far).
The concept is simple. Anytime you make more of something, it’s value gets diminished because it’s so prevalent. However, the more rare something is, the more it tends to rise in value because it’s so scarce.
So when the Canadian central bank prints more dollars (aye!), it dilutes the the value of that money. This now bringsa about two very serious road blocks for the Canadian dollar. Interest rates don’t give you an incentive to hold Canadian dollars (CAD) when there are others out there that literally pay 12 times higher (3% vs. 0.25%)! Also, Australia has resisted emploring Quantitative Easing while Canada is embracing it.
Therefore, when one country purposefully “waters down” their currency and another does not, it only makes sense that the latter should rise against the former.
Now there are other economic factors too that favor Australia over Canada...however, I wanted to point out two that were so important that they alone could help to keep this uptrend intact.
Don’t have a currency (forex) account yet? Get a demo here to check this market out. Don’t know where to start? Click here and I’ll walk you through it “step by step” in this video.
Then watch this video and I’ll show you how simple the trading station is to use.
Ready to try this in a live account? Go here and open up a standard mini account to get started. Mini accounts have a lot size of 10k or 10,000 units. I’d suggest starting with no less than $5,000.
New to this market and want an inexpensive education in it first? Go here to get started in an online course that is available to you 24 hours a day that comes with live instructors that are there to answer your questions as you read view the videos or read through the material. You can get your online forex education for just $19.99. Remember, too, that it comes with a money back guarantee so you have nothing to lose.
So be proactive. After all, there’s a good chance your stocks, mutual funds and ETFs are slumping yet you still need something to be heading higher for your retirement. So get started today!
Contributing Writer
