# When Should I convert USD?



## downbytheriver (May 2, 2016)

Hey guys, I run a business that is mainly in USD ... last few weeks usd has dropped about .20 on the dollar. I have around 30k in USD from rev in the last couple months and plan on doing norbert's gambit periodically throughout the year to convert it to CDN at the lowest cost. 

Is there any currency experts out there that might be able to provide some insight or predictions on where the usd vs cdn is heading? Of course I know, its all speculation but was just curious to hear some peoples opinions who are more expert in the area.
thanks alot!


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## mordko (Jan 23, 2016)

If I were to take a bet, I would bet on CAD falling vs USD Over the next couple of months. Here is why:

- CAD strengthened because oil went up. Short term factors played a role, eg strike in Kuwait. It's over. Also Saudis are ramping up productions, and so is Iran.
- CAD is up also because government decided to spend more than anticipated, thus preventing Bank of Canada from dropping rates. That's a short term effect, rates will be impacted by oil and external factors going forward.
- USD is down because the Fed promised to raise rate 4 times and then revised due to China concerns. China looks to be over the worst fears. Raises will come sooner or later.


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## AltaRed (Jun 8, 2009)

^+1 I'd wait for a few months to see how this shakes out as well. More potential for loonie going down than going further up.


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## downbytheriver (May 2, 2016)

mordko said:


> If I were to take a bet, I would bet on CAD falling vs USD Over the next couple of months. Here is why:
> 
> - CAD strengthened because oil went up. Short term factors played a role, eg strike in Kuwait. It's over. Also Saudis are ramping up productions, and so is Iran.
> - CAD is up also because government decided to spend more than anticipated, thus preventing Bank of Canada from dropping rates. That's a short term effect, rates will be impacted by oil and external factors going forward.
> - USD is down because the Fed promised to raise rate 4 times and then revised due to China concerns. China looks to be over the worst fears. Raises will come sooner or later.


Wow, fantastic points. Very much appreciated. I'm not in a rush to convert I just noticed it going one way and was wondering if I should move now. Thanks for the insight! Going to research some more of those points.


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## none (Jan 15, 2013)

Although I generally think currency speculation is a bit silly maybe I'll try it this time. I do agree that the CAN $ has more downside than upside.


if i wanted $200 USD - what's the best method? Just hit up Royal bank? Not really any other way is there for that pittance of cash?

Thanks.


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## james4beach (Nov 15, 2012)

I get nervous when everyone is thinking the same as me. I'm also waiting and expecting that CAD will fall.

Like it or not, the CAD is treated as a "risk asset". It rallies along with markets in general, due to its correlation with resources, which in turn correlate with everything. So in the last few months we've had a general market rally -- stocks & commodities -- and CAD along with it.

As I've posted before I'm bearish on the market in general, and I think this is a temporary rally in stocks & commodities & CAD. I think when it runs out of steam, commodities & stocks & CAD will decline again.

For you folks expecting that the CAD rally won't continue, you are implying there that you expect stocks & commodities will fall as well. Unless they stop being correlated


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## 0xCC (Jan 5, 2012)

none said:


> if i wanted $200 USD - what's the best method? Just hit up Royal bank? Not really any other way is there for that pittance of cash?
> 
> Thanks.


A whole 2% difference in exchange rate on $200 is $4 which is probably less than commission on one side of a gambit trade not to mention bid/ask spreads, your time and stress and market moves while the gambit is in progress.

So yeah, for $200, just know that you are paying $2-$5 for the privilege of getting those Andrew Jacksons, Abraham Lincolns and Benjamin Franklins (and maybe Harriet Tubmans ).


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## Spudd (Oct 11, 2011)

none said:


> if i wanted $200 USD - what's the best method? Just hit up Royal bank? Not really any other way is there for that pittance of cash?


Those corner store exchange places usually have better rates than the banks.


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## james4beach (Nov 15, 2012)

Here's a chart that shows an overlay of CADUSD and EWC (the Canadian index from USD perspective)

There you can see the clear correlation between stocks and CAD. It is nearly a perfect correlation since 2014. The two even turn and start reversing at the exact same point in early 2016.

Stocks continuing to rally = higher CAD


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## downbytheriver (May 2, 2016)

not sure where all the $200 talk came from haha. but I'm sitting on around 30k USD and its being added daily from biz rev. $200 doing norberts gambit would be rather counter intuitive haha.
I Just was wondering if I should move now ... and of course, I know currency speculation is not some exact science, otherwise you guys would be too busy on your yachts to reply haha. but appreciate the insightful comments. I think I'm going to hang on and see where its at in a month or so.
Thanks for the replies! Any more comments to add keep them coming.


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## humble_pie (Jun 7, 2009)

james4beach said:


> Here's a chart that shows an overlay of CADUSD and EWC (the Canadian index from USD perspective)
> 
> There you can see the clear correlation between stocks and CAD. It is nearly a perfect correlation since 2014. The two even turn and start reversing at the exact same point in early 2016.
> 
> Stocks continuing to rally = higher CAD



it's a very nice interactive chart, thankx very much.

but a 2-year timeline does not tell enough imho. Looking at the longer terms, see how the correlation breaks down. Five years & it's weaker. Ten years & EWC is leaping all over the place. Fifteen years - EWC seems to have been launched in 2001 - & EWC has almost no relationship to the much more sedately moving USD/CAD.

i believe that if one could put up, say, a chart since WW II comparing the TSX as expressed in USD & the actual USD/CAD exchange rate, one would see even greater discrepancies. One would see a gradually but steadily rising TSX along with a far more stable USD/CAD FX rate that rarely strays outside a .80/1.20 band.


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## james4beach (Nov 15, 2012)

You're right, in the longer term there is no easy correlation like that. Good point.

I am definitely hoarding USD in anticipation for a lower CAD. So far I'm sitting on 25K USD that's purely cash and ready to convert in an instant (with gambit!)


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## lonewolf (Jun 12, 2012)

Over the last 20 yrs the Canadian dollar average rally is close to 2% in about 5-6 week time frame ending about now (eye balling seasonal chart). Tried to down load seasonality chart for some reason was having to much trouble.


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## lonewolf (Jun 12, 2012)

The last 6 days were down in the dollar index & the slop of the decline has become steep. Currency trends often end with a sharp spike & subsequent reversal.


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## james4beach (Nov 15, 2012)

humble_pie said:


> but a 2-year timeline does not tell enough imho. Looking at the longer terms, see how the correlation breaks down.


I agree 2 years isn't much, but the 9 year chart also shows the correlation back to at least 2007. I was surprised to see this actually, I did not expect it would look like this. Pasting a screen shot since I can't get a link









Look at the shapes of the spikes and reversals; those are strongly correlated. Not a perfect correlation by any means but still quite strong over 9 years.


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## none (Jan 15, 2013)

y'think? Just do a correlation test or it. It's easy. Send me a link to the data and I'll even do it for you.


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## humble_pie (Jun 7, 2009)

james4beach said:


> I agree 2 years isn't much, but the 9 year chart also shows the correlation back to at least 2007. I was surprised to see this actually, I did not expect it would look like this. Pasting a screen shot since I can't get a link
> 
> View attachment 9994
> 
> ...





yes i saw the major spikes & reversals. In recent years, they do coincide chronologically as you say. However imho the EWC swings are so great - ie the deviation from USD/CAD - that the timing becomes less significant.

in the past there have been long periods of time when the canadian dollar was pegged to the greenback. Such periods would have destroyed any TSX/USD/CAD correlation, no?

EWC has only existed for 15 years, but a better time frame would be 50 years, or the period since WW II, imho.

another question would be which comes first, the chicken or the egg. The TSX would lead the currency, not lag the currency or act in knee-jerk concert with the currency, as a harbinger of the canadian economy in general. One can see this lead effect in your brief chart.


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## ontario99 (Apr 13, 2016)

james4beach said:


> I get nervous when everyone is thinking the same as me. I'm also waiting and expecting that CAD will fall.
> 
> Like it or not, the CAD is treated as a "risk asset". It rallies along with markets in general, due to its correlation with resources, which in turn correlate with everything. So in the last few months we've had a general market rally -- stocks & commodities -- and CAD along with it.


I so hope you and the others here are correct - I exchanged 35K USD a week ago and invested some of it in the Canadian market, but I am waiting to invest the rest - I also still have about 45K of USD to exchange to CAD this year (I have recently moved from the US and I am starting to build a part of my portfolio in the Canadian market), but I am waiting... The exchange rate has risen already in the past week. It would be great if I could go in high when CAD is declined, and then buy stocks right after it with lower prices also.


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## AltaRed (Jun 8, 2009)

Remember you have to declare cap gains (as a minimum) on currency conversions. CRA allows an annual $200 exemption but anything above that is supposed to be declared. Example: when you entered Canada, your USD would have been worth $XXX CAD when you crossed the border. If you convert USD later and get a much better conversion rate because the loonie has fallen, you have a taxable cap gain.

Many people are not aware of that and do not report it. I suspect CRA knows a lot of people do not report cap gains/losses on currency conversions, and probably in most cases, the amount of money involved is not worth it.....but at some level, I suspect CRA gets very interested.

Added: http://www.adjustedcostbase.ca/blog/calculating-adjusted-cost-base-for-foreign-currency-cash/


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## ontario99 (Apr 13, 2016)

AltaRed said:


> Remember you have to declare cap gains (as a minimum) on currency conversions. CRA allows an annual $200 exemption but anything above that is supposed to be declared. Example: when you entered Canada, your USD would have been worth $XXX CAD when you crossed the border. If you convert USD later and get a much better conversion rate because the loonie has fallen, you have a taxable cap gain.
> 
> Many people are not aware of that and do not report it. I suspect CRA knows a lot of people do not report cap gains/losses on currency conversions, and probably in most cases, the amount of money involved is not worth it.....but at some level, I suspect CRA gets very interested.


Interesting... How do they figure out you actually had capital gains or not? Since the currency always fluctuates in both ways and there is no base line, who is to say your currency exchange had a capital gain or loss? Especially when someone is doing the exchange in one direction only? Well, even if it's bi-directional, you cannot really prove at what price you initially bought the USD (or CAD) at, correct?


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## AltaRed (Jun 8, 2009)

ontario99 said:


> Interesting... How do they figure out you actually had capital gains or not? Since the currency always fluctuates in both ways and there is no base line, who is to say your currency exchange had a capital gain or loss? Especially when someone is doing the exchange in one direction only? Well, even if it's bi-directional, you cannot really prove at what price you initially bought the USD (or CAD) at, correct?


You always have a paper trail, right? The USD exists in accounts, i.e. in your case, the account the USD was in when you stepped across the border, and the Bank of Canada rate as of that day applies. Then when you convert USD to CAD cash later, there is a paper record of the date of conversion and the conversion rate, or if you use USD to buy a USD stock, you converted USD from cash to a security and it is at that point you have 2 currency effects: 1) conversion from USD cash (at a CAD equivalent) for a cap gain (or loss) and then a CAD equivalent ACB that you will use in the future when you sell the security. Seems pretty logical to me for that example. Follow the link I provided you for how that works.

So yes, you always have a record...with perhaps one exception. Using USD cash for minor cash purposes while in the USA. But if you use a debit or credit card, you again have a paper record. I think the issue is negligible for spending USD cash on minor consumables, but it would be an issue if you bought capital (e.g. USD stocks, bonds) assets or real (snowbird) property.

How many Canadians actually keep track of foreign exchange gains or losses the way they should is yet a different question.


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## ontario99 (Apr 13, 2016)

AltaRed said:


> You always have a paper trail, right? The USD exists in accounts, i.e. in your case, the account the USD was in when you stepped across the border, and the Bank of Canada rate as of that day applies. Then when you convert USD to CAD cash later, there is a paper record of the date of conversion and the conversion rate, or if you use USD to buy a USD stock, you converted USD from cash to a security and it is at that point you have 2 currency effects: 1) conversion from USD cash (at a CAD equivalent) for a cap gain (or loss) and then a CAD equivalent ACB that you will use in the future when you sell the security. Seems pretty logical to me for that example. Follow the link I provided you for how that works.
> 
> So yes, you always have a record...with perhaps one exception. Using USD cash for minor cash purposes while in the USA. But if you use a debit or credit card, you again have a paper record. I think the issue is negligible for spending USD cash on minor consumables, but it would be an issue if you bought capital (e.g. USD stocks, bonds) assets or real (snowbird) property.
> 
> How many Canadians actually keep track of foreign exchange gains or losses the way they should is yet a different question.


Thank you for your post.

I looked at the link. I believe I know what you are trying to say. And I think we are talking about two different things. You are saying USD capital gains converted from CAD will be calculated using Adjusted Cost Base, right? I was talking about just exchanging money from USD (which I came to Canada with from the US) to CAD once (and I originally thought you were saying this will cause capital gains/losses.) As for my USD holdings in Canada (which wasn't converted from USD – It's always been USD), my accountant uses the average ANNUAL exchange rate for the taxation year to calculate the CAD cap gain/losses. 

I do have a question for you though, or for anybody who may know the answer to this - If I exchanged, say, $10,000 USD to CAD now getting, say, $12,500CAD, and if I exchanged this money ($12,500CAD) two years later and say, I only get $8,500USD back, can I report $1,500 capital loss? If I can report a capital loss, how do I prove it especially if I did a similar exchange 20 times in the last two years while the exchange rate fluctuated widely?

It's easy to track capital gains on stocks even if you trade the same stock so many times within a year, because brokerage firms give you a nice report at the end of the year that you can use for reporting taxes, but cash? That would be incredibly hard, unless I am missing something here. 

2nd thought - I guess I can ask my tax accountant about this when I get a chance...


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## AltaRed (Jun 8, 2009)

ontario99 said:


> Thank you for your post.
> 
> I looked at the link. I believe I know what you are trying to say. And I think we are talking about two different things. You are saying USD capital gains converted from CAD will be calculated using Adjusted Cost Base, right? I was talking about just exchanging money from USD (which I came to Canada with from the US) to CAD once (and I originally thought you were saying this will cause capital gains/losses.) As for my USD holdings in Canada (which wasn't converted from USD – It's always been USD), my accountant uses the average ANNUAL exchange rate for the taxation year to calculate the CAD cap gain/losses.


Actually when you came to Canada, your USD had a CAD equivalent value based on the exchange rate on the day you entered Canada (it matters not that you brought it with you). It has a CAD equivalent based on the forex rate of the day you arrived That is its ACB. Now when you actually exchange that USD into CAD, you will get physical CAD in your hands. You will have either gottan a cap gains or a cap loss based on that transaction.

Example: If when you came to Canada with $10,000 USD, and the forex rate was 1.33, you actually have the equivalent of $13,300 CAD. Now when you actually sell that $10,000 USD at say a forex rate of 1.44, you will get $14,400 (less forex commission). You actually have a gain of 14,400 - 13.300 = $1100 cap gains to declare (actually $1100 less forex commission).



> I do have a question for you though, or for anybody who may know the answer to this - If I exchanged, say, $10,000 USD to CAD now getting, say, $12,500CAD, and if I exchanged this money ($12,500CAD) two years later and say, I only get $8,500USD back, can I report $1,500 capital loss? If I can report a capital loss, how do I prove it especially if I did a similar exchange 20 times in the last two years while the exchange rate fluctuated widely?


It is my understanding you can claim the capital loss...except (and I am beyond my pay grade here) I think it is not $1500 USD, it is the CAD equivalent of that amount. Doesn't matter if you do that 20 times. Your paper records will show the transactions for buys/sells each time. I stand corrected on the actual amount of cap loss to be reported.



> It's easy to track capital gains on stocks even if you trade the same stock so many times within a year, because brokerage firms give you a nice report at the end of the year that you can use for reporting taxes, but cash? That would be incredibly hard, unless I am missing something here.


I actually call it a useless activity in my view and probably why people tend to not do some of these things. FWIW, I mention all this to you because you specifically are looking to aribtrage forex rates and make some money on doing so. If you do, you could owe the tax man some cap gains. Lovely, isn't it?


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## ontario99 (Apr 13, 2016)

Thank you for your reply. No it wasn't me who was talking about exchanging from USD to CAD and CAD to USD. I have no plans to do that. (Someone did mention buying some kind of ETF's to do that - it sounded complicated.) I am retired and that sounded too much like a real job! 

I just moved to Canada from US last year and I am buying a bunch of Canadian stocks now and planning to keep them to generate income (via dividends) to be used for living expenses for two reasons 

1) I get 25% bump on my money when I convert USD to CAD to invest (that's already like 8 years worth of dividends from the US stocks I hold/held - so I am selling the US stocks and then converting the proceed to CAD and buying Canadian stocks). 
2) since dividends on Canadian stocks have better yields than in the US stocks I currently hold. 
I am also putting money in Canadian high interest savings for the same reason as above but the money in the savings are for spending - all for living expenses.

I will have to keep money in registered accounts in the US (which is in $USD) for now - I wish I could take the money out when the exchange rate is favorable for me but registered accounts incur income taxes, so I don't want to pull too much out at once. Even non-registered accounts incur capital gains taxes so I am doing it gradually each year. 



AltaRed said:


> Actually when you came to Canada, your USD had a CAD equivalent value based on the exchange rate on the day you entered Canada (it matters not that you brought it with you). It has a CAD equivalent based on the forex rate of the day you arrived That is its ACB. Now when you actually exchange that USD into CAD, you will get physical CAD in your hands. You will have either gottan a cap gains or a cap loss based on that transaction.
> 
> Example: If when you came to Canada with $10,000 USD, and the forex rate was 1.33, you actually have the equivalent of $13,300 CAD. Now when you actually sell that $10,000 USD at say a forex rate of 1.44, you will get $14,400 (less forex commission). You actually have a gain of 14,400 - 13.300 = $1100 cap gains to declare (actually $1100 less forex commission).


You may be 100% correct, but this sounds ridiculous to me. I moved to Canada in August of 2015 when USD->CAD was 1.33. I already exchanged close to 100K back in October when the rate was 1.30, then lately another 25K at 1.25 and another 35K at 1.24, and I still have more to convert. So so far, all the money I converted are at the lower rate than what the rate was when I moved to Canada. Does this mean I can claim capital loss? And I have a feeling going forward in the next 10-20 years, most likely the rate will be less favorable than 1.30. Which means I can harvest capital loss each year. If I had moved to Canada in December when USD->CAD was 1.45, that would have given me even more capital loss... In the same token, if you moved to Canada in 2011-2013 when USD was less than $1CAD, you would be having to report huge capital gains if you convert money now. That makes absolutely no sense to me. Lots of tax stuff makes no sense to me anyway, so this is nothing new though LOL. That's why I have a tax accountant who does my taxes. I will definitely ask her about it.

Just to add, maybe I am misunderstanding something... You said "when you came to Canada, your USD had a CAD equivalent value based on the exchange rate on the day you entered Canada (*it matters not that you brought it with you)*." so I just assumed that you are saying, whatever USD I own in the US that I move later to Canada will be compared against the CAD/USD rate from my move date.


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## AltaRed (Jun 8, 2009)

Whatever USD cash you have anywhere when you moved to Canada has a CAD equivalent ACB on the date you entered Canada...whether it is still in the USA or in Canada. Except registered accounts that is.

You are right about the absurdity of it all, but I didn't invent the rules. If what you say is correct, yes, you could claim a capital loss once you "convert the cash", and yes if that had occurred in 2011-2013, there would be a huge capital gain if you "convert the cash". Converting the cash means: 1) exchanging it for CAD, 2) using it to buy a capital asset or a real estate asset, or 3) even spending it on consumables. This latter point is absurdity to the extreme in my opinion and I cannot imagine anyone actually keeping track of that. I know I would have never thought about it.


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## humble_pie (Jun 7, 2009)

ontario99 said:


> You may be 100% correct, but this sounds [altaRed's suggestion that ontario99 must use the fair market value of securities on the date in august/15 when he entered canada as his cost base for said securities] sounds ridiculous to me.
> 
> I moved to Canada in August of 2015 when USD->CAD was 1.33. I already exchanged close to 100K back in October when the rate was 1.30, then lately another 25K at 1.25 and another 35K at 1.24, and I still have more to convert. So so far, all the money I converted are at the lower rate than what the rate was when I moved to Canada. Does this mean I can claim capital loss?
> 
> ...




ontario99 you are one lucky border crosser! you could hardly have picked a better date if you had been planning it all out for 25 years.

altaRed is quite right. You are now the proud owner of a bunch of US securities whose cost base for tax purposes is sky high as the 4th of july, because you entered canada in august 2015 (remember that, in cases such as this as well as some other types, cost base for tax purposes can be lightyears away from true cost base, ie the dollars that were actually paid.)

whether it makes sense to you or not, it looks like you can now harvest tax losses from all your US securities (the ones you owned in august/15) for several years to come. What a lucky dog you are!

next task: be sure to invest in something in canada that will yield at least a few smidgins of capital gain. So you can use up those tax losses & pay no capital gains tax whatsoever, at least for some time to come. Remember that tax losses can be carried forward indefinitely ... i think i will now refrain from referring once again to What an LD you are.


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## humble_pie (Jun 7, 2009)

ontario if i am following you correctly you are selling US stocks & purchasing canadian securities with the proceeds.

imho this is the perfect setup for easy, seamless, correct tax reporting of the currency conversions. 

to be blunt, i believe you are leading yourself astray upthread, when you fret about having to convert USD to CAD, what if there's a capital gains tax on the dollars, etc.

the reality is going to be much easier. All your US securities have a cost base which is their market value on the day you officially entered canada in august 2015. You have no capital gains/losses to worry about until you sell them, which you say you are planning to do gradually.

when you do sell, you will have to report the proceeds for each securitiy in canadian dollars to the CRA. Although in reality you may receive the proceeds in your USD broker account, nevertheless the CRA wants to hear about the transaction in CAD. So for each sell transaction, you'd look up the Bank of Canada exchange rates on the date of sale. It's always been the BOC noon rate but i hear they are now changing to a closing BOC rate. 

that's all there is to it. Presto, from the tax authorities point of view, you now have cash proceeds from sale of your US securities in CAD. The taxable conversion part of the strategy has now been successfully completed.

you may still have to gambit the USD from your USD broker account into CAD, using the famous currency arbitrage strategy. This will not really generate any gains or losses. A gambit pair is done so fast at spot rate that only a few pennies of gain or loss can ever happen. Don't fret about these.

once your gambit trade is done, you will have a) your taxation reportage all correctly set up, plus b) you'll have nice new freshly-arbitraged canadian dollars in your broker account.


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## ontario99 (Apr 13, 2016)

Thank you all for your posts!! I think I have officially hijacked the OP's thread! (Sorry OP! I will try to butt out after this...)

You are so right - I am one lucky person for moving here at the right time! (Well, I still think this FX incurring capital gains/loss is totally absurd like Altared says.) Either way, even without the ACB thing, I am still lucky because I could have moved two years ago instead when USD was much weaker and I would have been spending 25% more money than I am now. Strangely enough, although many things are more expensive in Canada than in the US, I am keeping the same budget number ($USD=$CAD) without any issues, so it has been great. I know there will be weak USD sometime in the future, so it gives me confidence that I could most likely weather that. 

My tax accountant told me to print out account balances from all my brokerage accounts in the US on the day of my move, which I did (She said she needed to use those numbers to figure out the gains/losses in each country, or something like.), so that part's all good. I have an USD account with TD Canada, so what I am doing is to transfer my USD from my Fidelity in the US to my TD Canada USD, or funnel through my money from Bank of America to TD Canada USD (I am now setting up a TD USA account to make the transfer easier/cheaper), and then, when I want to, exchange the money from my TD Canada bank account into my TDDI Canada cash account (I get a better rate this way than exchanging into my TD Canada checking account.) I read somewhere that doing the ETF gambit thing will virtually eliminate the transaction fee, but I also read doing it from USD to CAD could take up to 5 days to convert, in which time the FX could drastically change, so I am not touching that. I would rather pay a small fee for a sure number (I believe the fee is usually slightly less than 1%, so I will just have to live with that. (Getting anything over 1:1 is great and with 1:1.25+, I really have no complaints )).

Anyway, I will definitely ask my tax accountant about loss harvesting of FX. I am not sure if she did anything for the tax year last year for FX but anyway, I will find out for next year, for sure.


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## humble_pie (Jun 7, 2009)

ontario99 said:


> Thank you all for your posts!! I think I have officially hijacked the OP's thread! (Sorry OP! I will try to butt out after this...)
> 
> You are so right - I am one lucky person for moving here at the right time! (Well, I still think this FX incurring capital gains/loss is totally absurd like Altared says.) Either way, even without the ACB thing, I am still lucky because I could have moved two years ago instead when USD was much weaker and I would have been spending 25% more money than I am now. Strangely enough, although many things are more expensive in Canada than in the US, I am keeping the same budget number ($USD=$CAD) without any issues, so it has been great. I know there will be weak USD sometime in the future, so it gives me confidence that I could most likely weather that.
> 
> ...




WHAT'S GOOD: you appear to have a great accountant. Be sure to keep a couple copies of those august 2015 market printouts for all your US securities accounts.

WHAT'S NOT SO GOOD: your FX rate could be as high as 2% one-way at the TD or any other broker. It really is worth your while learning how to gambit properly (you would not be using the DLRs btw).

you would be using an interlisted canadian stock as a carrier stock. In your case, there is a supremely advantageous half-gambit you could do, in order to avoid all FX fees completely. The half-gambit is very simple. Goes like this.

- identify an interlisted canadian stock that you are planning to own. There are literally thousands of canadian interlisteds, so you have plenty of choice. For gambit purposes, this should be a reasonably liquid stock, ie significant volumes on both toronto plus a US exchange, plus ideally it should be a stock you do not already own.

- next, after you sell one of those US stocks that are on your to-do list, simply buy the interlisted canadian stock. Both in your USD account. Pay for the new stock with the USD proceeds from the sale of the old stock.

- last, after the shares have settled in your USD account (3 days) have them journalled over to your CAD account (unless, of course, the company pays its dividends in USD, in which case you'd want to leave the shares in USD account).

once the shares have arrived in CAD account, you will be the proud owner of the canadian stock you want, priced & valued in CAD. The entire episode will have not cost any FX fees whatsoever. Zero. Nada.

all this is made possible by the arbitrageurs, whose work keeps toronto & US prices of interlisted stocks picked clean to the bone. The exchange rate at which the above share purchase will have been made, will be the spot or money-centre bank rate, which also forms the bank of canada rate.

ontario if you are dashing enough to move lock, stock & barrel to another country when you are retired, then imho you are certainly dashing enough to accomplish a half-gambit .each:


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## ontario99 (Apr 13, 2016)

Thank you humble pie. I wish I had done that when I sold my TD and RY stocks that were in USD. (I ended up selling them and bought the same stocks in TSX in CAD because I didn't know to do what you said I could do...) Oh well. At least I know now.

I pretended to move 35K today (from my TD bank account to TDDI brokerage account) and checked their exchange rate against the market rate and the difference was slightly under 1%. That's one good thing about brokerage firms - they give you better rates than banks, but still, it's 1% of my hard-earned money, so I should really learn this gambit thing.

Thank you again!


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## getliquid (Mar 2, 2014)

Back in March $1USD=$1.4CDN based on bank rates, saw on the news CRA "might" start a audit spree on currency capital gains with the recent upswing... didn't exchange nearly as much as I wanted to, now its $1USD=$1.25CDN...


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## james4beach (Nov 15, 2012)

Obviously a lot of us are in the USD/CAD speculation game. Personally I'm looking to convert 20K USD and here're my two cents

There was a panic today about the US Fed possibility of raising rates in June, and a big move in USD/CAD. It's now gone above the 50 day moving average which many technicians will interpret as a start in the rally of USD/CAD upwards, above 1.30

I'm hoping the immediate rally might take it to 1.34 or even 1.36


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## mordko (Jan 23, 2016)

This smacks of astrology. For an immediate rally US employment and inflation have to pick up. If they do, then there is a possibility of rates going up in June so USD will go up. What's happening with oil is the other side of the equation, unpredictable in the short term. 

Surely moving averages have nothing to do with what happens next.


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## james4beach (Nov 15, 2012)

I think many hedge funds, and even algorithms that drive markets, do watch these technical indicators. The 200 day moving average doesn't have meaning because god decreed it has meaning. Yes it's arbitrary, but it has meaning because for at least a hundred years, stock investors have grown accustomed to watching the same thing.

I believe that hedge funds use similar tools in commodity and currency markets.


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## mordko (Jan 23, 2016)

Yep. And hedge funds had awesome performances as of late. 

The thing with all these wonderful empirical "indicators" is that sooner or later, once someone notices and enough of the crowds starts acting on them, they become useless - at best.


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## mordko (Jan 23, 2016)

On top of it, right now the markets are driven by government actions, more than anything else. Feds tend to respond to statistics rather than moving averages.


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## james4beach (Nov 15, 2012)

Good point, government and central banks drive a lot of this.

It's like the old soviet central planning, isn't it? Worked out great for them!


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## mordko (Jan 23, 2016)

Yep. Although Soviets were not famous for quantitative easing and their stock markets.


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