As far as I’m concerned, there is nothing more beautiful than a 1960’s muscle car.
I should know. I’ve collected these beauties for years. My 1967 Camaro and 1969 Corvette Stingray don’t stay cooped up in the garage either. I drive them all over.
So I can tell you there is one drawback to good old fashioned American muscle: These cars do not get the best gas mileage.
So how do I keep from getting eaten alive from rising gas prices? Simple. I trade the Canadian dollar.
It may sound strange, but buying the Canadian dollar is actually a great hedging strategy against rising gas prices.
As oil rises from the current low 90’s to over $110 by this summer, you can use the Canadian dollar as your own protection against rising gas prices too. It’s an easy way to grab some extra profits while oil rises. Let me explain…
The Secret to Beating Rising Oil
As I’m sure you know, higher gas prices are largely due to higher oil prices. Oil is one of Canada’s biggest exports – not just to the U.S., but the rest of the world too.
So much of Canada’s economy depends on oil that rising oil prices actually affect the Canadian dollar. How closely do oil and the Canadian dollar track each other? See for yourself…
As Goes Oil…So Goes the Canadian Dollar!
Remember, as oil rises, so do gas prices.
So as gas prices rise here in the U.S., the Canadian dollar rises too. By buying the Canadian dollar in the currency market, I can gain the extra profits I need to cover rising gas costs.
I’ve been using this strategy for years to hedge against gas costs for my beloved muscle cars. Over the years, some of my peers have asked me, “Why not just trade oil instead?”
Simple. It’s because trading the Canadian dollar in the Forex market is easier and more efficient. The Canadian dollar has greater liquidity, less slippage, no commissions when I buy or sell and I can enter and exit easily anytime 24 hours a day.
So trading the Canadian dollar is like getting a “better oil” trade.
Later this year, oil is poised to skyrocket thanks to rising commodity prices and eventually a downturn for the dollar. I see oil hitting at least $110, if not higher by next summer.
And the Canadian dollar will love every minute of it.
The Canadian Dollar Has Already Given
My Subscribers a 79% Gain
I’m not the only one hedging my rising gasoline costs; my Currency Cross Trader subscribers are too.
Our first trade of 2011 was a bet on the Canadian dollar. So far, this trade is already up over 131 pips (that’s about a 79% rise for you non-traders) – in less than a week.
In fact, we locked in that 79% gain on half of this trade in just 48 hours. And the rest of this trade is still rising as of this writing.
This is just one small example of the Canadian dollar’s exceptional potential this year. As oil continues to rise, this commodity-dollar will continue to rally. Why not take advantage of rising oil, by making a few strategic plays on the Canadian dollar?
By the way, if you’re not a currency trader, you can just buy and hold the Canadian dollar in a CD or ETF to take advantage of the Canadian dollar’s rise. But personally, I’d rather trade the Candian dollar in the Forex market for the bigger profit opportunities.
Bottom line: Most of us can’t do a thing about rising gas prices. But right now you can create a hedge against these rising costs by trading the Canadian dollar.
Sean Hyman, Editor
Currency Cross Trader