In 2012, my top investment thesis was such:
|USD/CAD at major support/ psychological level|
|Collapsing Current Account|
Maybe I was a bit to early? My top conviction call with regards to the currency market in 2013 is positioning for a larger-than-normal move in the USD/CAD exchange rate.
Historically we are at low levels (parity, as seen on the chart above) which has offered support for the currency pair.
Second, volatility is none existent in all currency pairs, but particularly in this one.
Fourth, out of all of the major developed central banks, they have been the most hawkish over the past few years. This will have to end in a world where all paper currency is being devalued.
Obviously, I have a bearish bias in the Canadian dollar however I am putting on some straddles in FXC at this time (longer dated straddles) and will begin to adjust the trade as needed. Long volatility position for the moment.