THE WisdomTree BLOG
DGR: For When Diversification Actually Diversifies
DGR & HID: When Life Screams “Cheap Loonie”
We frequently analyze purchasing power parity (PPP), which says that fairly valued exchange rates should cause similar items to have the same price no matter where in the world they are purchased.
The Bank of Canada’s July 12 overnight interest rate hike of 25 bps to 0.75% will be the first of several if the market consensus proves correct. This opens up possibilities for investors who want exposure to equities outside Canada but realize that the euro, yen and other currencies may be vulnerable relative to CAD if the BOC stacks up the rate hikes.