Quote:
Originally Posted by simarik
wouldn't surprise me at all but I'd predict a quick bounce back down. I'm not going to trade it. How about if Chavez invades Columbia and USA steps in, or doesn't? Oil will go up farther and send the pair back down again. We know how well Bush and Chavez get along, serious Venezuelan threats at cutting off oil would impact this pair. I'm watching it closely.
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If that happened, I would be more concerned with the dollar dropping due to the US's diminishing popularity around the globe.
From oil, a rise in prices wouldn't by secondary concern. My primary concern would be a dramatic increase in volatility which could in turn cause volatile price action throughout the commodities sector. Equities and credit markets would likely see more dramatic price action on its own as well.
This wouldn't have as great effect in USDCAD as it would in pairs like USDJPY, USDCHF and AUDUSD; but it certainly would lean on price action.