EP350 Navigating the 2025 Currency Exchange CAD vs USD with Rahim Madhavji

A Canadian Investing in the U.S. with Glen Sutherland

Guest: Raheem Madjavi, President of Knightsbridge Foreign Exchange Topic: Currency Exchange, Interest Rates, and Economic Trends Key Points Discussed: 1. Knightsbridge FX Overview o Knightsbridge FX specializes in currency exchange services, offering better rates than banks for buying/selling US dollars. o It's often cheaper than using traditional banks, but users should shop around. 2. Factors Influencing the Canadian Dollar (CAD) o The CAD's strength depends on the relative performance of the Canadian and US economies. o A stronger US economy draws investment, strengthening the US dollar. o Recent trends:  Canada is cutting interest rates faster than the US, driving funds into the US.  Economic uncertainty, such as potential tariffs, creates a risk premium that weakens the CAD. 3. Inflation and Interest Rates o Lower inflation in Canada allows for more rate cuts to stimulate the economy. o The US economy remains robust, leading to fewer rate cuts. o Rate cuts in Canada could continue, potentially weakening the CAD further in the short term. 4. Tariff Concerns and Economic Risks o Tariffs could severely impact the Canadian economy, pushing the CAD down further. o If implemented, the CAD could weaken to 1.50 against the USD. 5. Long-Term Outlook for CAD o Currency fluctuations are cyclical and often tied to resource prices like oil. o In the next 1–3 years, Canada's economic prospects may improve, stabilizing the CAD. 6. Investment Advice on Currency Timing o Avoid trying to time the currency market; it’s unpredictable due to global events (e.g., wars, political changes). o Instead, focus on the fundamentals of your business or investments. o If an investment makes sense financially, proceed without overanalyzing currency trends. 7. Practical Tips for Investors o Buy currency only when needed rather than speculating on future rates. o Accept that currency markets are volatile and plan investments to account for fluctuations. 8. Closing Thoughts o Stability in currency rates is desirable for investors and businesses. o Successful investments should generate returns that outweigh short-term currency fluctuations. o Focus on long-term goals rather than being distracted by market timing. This episode highlights the importance of understanding macroeconomic factors while emphasizing pragmatic strategies for investors dealing with cross-border transactions.