My favorite currency analyst, Marc Chandler of Brown Brothers Harriman, likes the Canadian Dollar, and so do I. The Loonie reached parity with the USD last year, and is flirting with parity again. Among the reasons he gives is the stronger banking system, and I have been watching Bank of Montreal (NYSE:BMO) for months. Nice financials and an attractive dividend. He doesn’t mention the other reason to like Canadian assets: the economy has a large commodity component, and commodities are going to be a winner in any US or global economic recovery.
Since the March 2009 bottom, the iShares Canada ETF (NYSE:EWC) has outperformed the S&P 500 (click on charts to enlarge):
and the Loonie ETF (NYSE:FXC) has out performed the US Dollar ETF:
Still looking for a near term pullback, but when it’s time to go long, I will be looking at assets from north of the border.