Features
Return to Ukraine: searching out the Rosner family past
Introduction: Not too long ago we were contacted by former CBC Manitoba managing editor Cecil Rosner, who asked us whether we’d be interested in publishing a story about a trip he took in 2012 to visit the area in Ukraine where both his parents were born. Although it’s been 10 years since Cecil visited Ukraine, given the current situation in that country we thought it timely to get a sense of what life was like in Ukraine prior to the Russian invasion.
By CECIL ROSNER ““Oi — look at the way the schlemiel drives.”
We are bouncing along the potholed roads of Western Ukraine, heading from Lviv to my mother’s hometown of Buczacz. Our driver and guide isn’t Jewish, but that doesn’t stop him from endlessly whistling Fiddler on the Roof tunes and inserting Yiddishisms into every second phrase.
“These guys are all ganefs (thieves),” he says of the policemen we pass, as he forms his thumb and forefinger into a pistol and slowly pulls the trigger. Alex doesn’t like the speed traps the highway patrols set up, and he appreciates oncoming drivers signalling him to beware of cops just beyond the next hill. It’s an important issue for our driver, who crisscrosses Ukraine’s roads all year-long, ferrying tourists to distant towns and villages in search of their Jewish ancestors.
For Alex, who holds a history degree and is an expert at tracing genealogical roots, it’s an occupation he never dreamed he would have. But in the chaos of the Soviet Union’s collapse, when jobs were evaporating and everyone was trying to reimagine their lives, it seemed like a useful niche to pursue – especially as foreigners were finally trying to discover exactly what had happened to their relatives during the Second World War.
That’s why I’m here too, along with my wife and a cousin. Both of my parents were born in the region, and both were here when the Nazis occupied the area in 1941. In different improbable and miraculous ways, they both survived the war and emigrated to Canada. But every single other family member was shot, gassed, beaten or starved to death by the Nazis and their collaborators. We came here to see what traces of their lives remained.
It seemed logical to make our first stop the local museum, right across from the old city hall. Buczacz is little more than a village, with about 13,000 people. In the early part of the 19th century, Jews made up two-thirds of the population. While that number ebbed and flowed over the years, Jews were still in the majority when the Nazi occupation began. But that would have been difficult to discern in the museum.
In all the display cases, and in the colourful photo album that the town produces, there is no specific mention of a Jewish population. There is scarcely any reference to the Second World War, except for a notation that the town “was released from German invaders and captured by the Soviet Union.” Wouldn’t a town’s museum want to address what became of the majority of the population? What happened to thousands of farmers, shop owners, tailors, tinsmiths, doctors, lawyers and politicians? Doesn’t the mass roundup and extermination of most people in town even rate a mention?
The only hint of any Jewish presence came in the form of artifacts from the life of Shmuel Agnon, a Jewish writer born in Buczacz who won the Nobel Prize for literature. But the entire fate of the people Agnon wrote about had been erased.
Alex had little luck getting the museum’s employee to throw any light on what the town was like in the immediate pre-war period. She genuinely seemed not to know. But there were a few things I already knew.
My mother, Mina, had been born here in 1913, and her family owned a wholesale distribution company. They carbonated water and stored it in big, forty-litre copper cylinders, shipping them along with ice to shops throughout the area. When she was 25, she married my father, Michael Rosner, who came from nearby Kolomaya. In 1939, they opened a small retail store on the main town square, probably within metres of the present-day museum.
When the war broke out in September 1939, there was a reprieve. The region came under the control of the Soviets, and Jews were under no immediate threat. All that changed when Hitler marched eastward in 1941. My father was conscripted by the retreating Soviets, and my mother was trapped behind Nazi lines for the remainder of the war.
For the next three years, every member of my mother’s family – her parents, five brothers and sisters, aunts and uncles and cousins – were dragged from their hiding places, bludgeoned or shot, or sent off to be executed. They were all dumped into unmarked graves. My parents’ first-born child – my brother – also fell victim, dying at the age of three in 1942.
My mother’s survival defied any normal odds. She fled from one hiding place to another, escaping just in time to avoid capture. She spent 11 months in the attic of a Polish family along with five other Jews. She took an assumed name and boldly convinced the Nazis she was Christian. Finally, after Buczacz was liberated, she re-united with my father and they came to Canada to start anew in 1948.
I had been to Buczacz once before, with my mother, in 1990. We came with a documentary crew to record her first visit back home since the war. It was an emotional trip and a difficult one for both of us. But we learned very little of the actual events that had transpired in the town, or the exact locations where they happened. That’s why, nearly 15 years after my mother’s death, I was returning for a second time.
I convinced Alex that our best strategy on this trip would be to find older people and ask them what they knew about the 30s and 40s. Alex seemed skeptical. For one thing, the war had begun more than 70 years ago, so it was unlikely there would be any useful first-hand witnesses at hand. And there was also the collective amnesia that pertained to inconvenient truths.
After all, a segment of the population had actively collaborated with Hitler. They were instrumental in helping identify and round up the Jews, the Communists, and all the other elements the Nazis wanted to destroy. Some might still be living in Buczacz and surrounding areas. Their children and grandchildren almost certainly are here.
The museum’s employee finally gives us a sliver of hope. There is someone in town we should visit – someone who knows the history and might be able to help us. His name is Mykola.
We drive for a few minutes and stop at Mykola’s house. I am expecting to find an elderly man who may have been a teenager during the war. Instead, we come upon a 40-something man in sweatpants and a Maple Leafs T-shirt. He is clutching a handful of papers and photographs. One of them shows a photo of Buczacz’s surviving Jews standing beside a memorial gravestone in 1944. Out of the original population of 10,000, no more than 100 survived. One of the people in the photo is my mother.
Mykola has taken an interest in wartime history, and now helps visiting tourists locate family remnants. He has a variety of interesting documents, including a map of pre-war street names, and a mid-19th century register of townsfolk. It turns out that he knows about some of the Jewish families that lived in Buczacz during the war – a handful of them have returned over the years, and he has helped them find their old homes and landmarks.
We ask Mykola if he could help solve a puzzle my mother and I couldn’t figure out on our previous trip. Her family had lived on a street called Zeblickevicie, which had changed names several times after the war. From her description, though, we knew it was beside a stream that ran into the Strypa River, a subsidiary of the Dniester.
We pile into the car along with Mykola and he directs us to the location. The stream had been covered over, except at the point where it emptied into the Strypa. Though the original home was no longer there, he shows us the exact location where my mother’s family had lived. I saw the idyllic surroundings, the lush vegetation around the quiet river, and for the first time I had an inkling of the peaceful life my mother experienced before the war changed everything.
While we were all walking along the old Zeblickevicie street, Mykola bumps into a friend and exchanges a few words with him. As we walk on, the friend stops my wife, Harriet, and our cousin Nina and says: “Mina Rosner – I am a Witness.” That is the name of my mother’s book. Alex is impatient. He had rich experience of locals trying to pester visitors, and he was eager to move us all along. But Harriet and Nina persist. It turns out the man on our chance encounter knows all about my mother’s story, and offers to take us on a tour of where she lived, where she went to school, where she hid during the war, and where her family members were killed.
Over the next 24 hours, Alex grudgingly admits he was wrong. Our serendipitous encounter has linked us up with Jura, a 60-year-old retired computer technician, astrologist and local historian. He knows my mother’s exact birthdate, and, it appears, everyone else’s in town. He has a photocopied version of my mother’s book, and he has pieced together her recollections with precise locations of many of the events she describes. If photographic memories actually exist, we figure he has one. He is a visiting tourist’s dream come true, and Alex has to take a back seat while Jura takes us on a remarkable tour of my mother’s life.
The first stop is just around the corner, on a street that used to be called Chechego Maya. I remember it from my mother’s stories, but we could never pinpoint it on our previous trip. Jura shows us the building where my mother’s sister and her husband ran a hardware shop. He knows the address because it’s listed in trade publications of the era. Though my mother’s original house and her parents’ store no longer existed, I finally had an authentic touchstone of some of her family’s life at the time.
Jura takes us to the pre-war building on Kolejowa Street that served as the cheder, the religious school, where Jewish kids studied. We visit the girls’ school and middle school where my mother was a student, and walk into Buczacz’s Sokol theatre, where she watched dramatic performances and movies as a teenager. A group of children is rehearsing a musical concert on stage, and I can imagine my mother sitting in the auditorium with her brothers and sisters and friends.
Just down the road, near an orchard, Jura shows us the garden of a long-ago demolished home where my mother hid during one of the Nazi aktions, or periodic killing sprees. A bunker had been constructed in the cellar, and this helped shield her and other Jews from capture. The Nazis conducted four major aktions during their occupation of Buczacz before declaring the town Judenrein, or completely free of Jews. But the declaration turned out to be false. My mother, along with dozens of others, managed to survive with the aid of courageous gentile families who risked their safety to shelter them.
In the middle of our travels, Jura pulls out a sheet of typewritten names – people who had served as policemen, gendarmes and SS officers during the war. I recognize some of the names. Some of the Nazi war criminals and their collaborators have been brought to justice, but the vast majority remain undetected and untried for their crimes.
We go to the Jewish cemetery, where many of the town’s Jews – including my mother’s parents – were taken to be executed. The place is untended and overgrown, a jumble of brush and junk, with headstones in various states of disrepair. We find my great-grandmother’s grave. It’s significant, because two plots over my mother buried her first-born child, Isaac, in an unmarked plot. I clear away the branches and debris from the group of headstones in the area to get a better view. I bend down and touch the ground where the brother I never met is buried. Exactly 70 years later, someone has come back to this place to remember.
Jura takes me down a path through brambles to a spot where survivors had erected a memorial to the war’s victims. The place is overgrown with trees and bushes now, but he says there was nothing here before the war. The marker no longer survives, and even if it did, it’s unlikely anyone would be able to find it without an expert guide.
Our next stop is Fedor Hill, another killing ground where thousands perished. It’s difficult to see traces of anything here, but Jura once again guides us to a marker commemorating the killing of 450 people during the early days of slaughter in 1941. It had been erected by a survivor’s family well after the war.
A far more prominent memorial on Fedor Hill is dedicated to the UPA, the Ukrainian Insurgent Army, the military wing of a movement that initially collaborated with the Nazis in hopes of winning an independent homeland. In fact, throughout our travels in Western Ukraine, there were numerous new memorials to Ukrainian nationalist fighters in places where it might have been logical to place markers noting the victims of the Nazi era. We saw this on the side of a synagogue in Ivano-Frankivsk, near the Jewish ghetto entrance in Lvov, and many other places. In my father’s hometown of Kolomyia, it was a similar story — no mention of Jews or Nazi victims in the local museum, no remnants of the huge Jewish population, and a patriotic memorial to Ukrainian nationalist figures on the site of a former synagogue. In the re-written history of today, the UPA and its related Organization of Ukrainian Nationalists are presented as groups that fought both Soviets and Nazis; no mention is made of the collaboration in 1941 that led to so much destruction during the war.
Throughout our trip to Ukraine, we were reminded of the upcoming election campaign and the ever-present imagery of Ukrainian nationalism, especially in the Western part of the country. In a land that was exercising its brand of democratic activity, we had to wonder how thoroughly the country had come to grips with its recent history. Many countries are wrestling with related questions, trying to reconcile horrendous events of the past with a way forward. But as in any process or truth and reconciliation, there needs to be an initial recognition of what took place. Erasing and denying the past is rarely the path to building a healthy future.
At the end of our tour in Buczacz, Jura wanted to know the exact date of my mother’s death. He also was interested in our birthdates and any other information he could glean from us. In a country that chooses to forget so much, he was something of an anomaly.
Features
Bias in America’s Colleges Produced Modern Anti-Zionism
By HENRY SREBRNIK Jon A. Shields, Yuval Avnur, and Stephanie Muravchik, professors at the Claremont Colleges in California, have just completed a study, “Closed Classrooms? An Analysis of College Syllabi on Contentious Issues,” published July 10, 2025, that draws on a database of millions of college syllabi to explore how professors teach three of the most contentious topics: racial bias in the criminal justice system, the Israel-Palestine conflict, and the ethics of abortion.
They used a unique database of college syllabi collected by the “Open Syllabus Project” (OSP). The OSP has amassed millions of syllabi from around the world primarily by scraping them from university websites. They date as far back as 2008, though a majority are from the last ten years. Most of the data comes from universities in the United States, Britain, Canada, and Australia.
“Since all these issues sharply divide scholars, we wanted to know whether students were expected to read a wide or narrow range of perspectives on them. We wondered how well professors are introducing students to the moral and political controversies that divide intellectuals and roil our democracy. Not well, as it turns out.”
In the summary of their findings, “Professors Need to Diversify What They Teach,” they report that they found a total lack of ideological diversity. “Across each issue we found that the academic norm is to shield students from some of our most important disagreements.”
Teaching of Israel and Palestine is, perhaps no surprise, totally lopsided, and we’ve seen the consequences since October 7, 2023. Staunchly anti-Zionist texts — those that question the moral legitimacy of the Israeli state — are commonly assigned. Rashid Khalidi, the retired professor of Modern Arab Studies at Columbia, is the most popular author on this topic in the database. A Palestinian American and adviser to the Palestine Liberation Organization delegation in the 1990s, Khalidi places the blame on Israel for failing to resolve the conflict and sees the country’s existence as a consequence of settler-colonialism.
The problem is not the teaching of Khalidi itself, as some on the American right might insist. To the contrary, it is important for students to encounter voices like Khalidi’s. The problem is who he is usually taught with. Generally, Khalidi is taught with other critics of Israel, such as Charles D. Smith, Ilan Pappé, and James Gelvin.
Not only is Khalidi’s work rarely assigned alongside prominent critics, those critics seem to hardly get taught at all. They include Israel: A Concise History of a Nation Reborn by Daniel Gordis, a professor at Shalem College in Israel. Gordis’s book appears only 22 times in the syllabus database. Another example is the work of Efraim Karsh, a prominent historian. His widely cited classic, Fabricating Israeli History, appears just 24 times.
For most students, though, any exposure to the conflict begins and ends with Edward Said’s Orientalism, first published in 1978. Said is the intellectual godfather of so many of today’s scholars of the Middle East, thanks in no small part to this classic book. Said was a Palestinian-American academic, literary critic, and political activist from a prominent Christian family. Educated at Princeton and Harvard Universities, two of America’s most distinguished centres of higher learning, he taught at Columbia University, another Ivy League institution, until his death in 2003.
Said was no crude antisemite. His writings were aimed at academics and intellectuals and he has, in my opinion, done more damage to the Jewish people than anyone else after 1945. Said claimed to be the first scholar to “culturally and politically” identify “wholeheartedly with the Arabs.” But he was also a political activist for the Palestinian movement opposing the existence of Israel.
Said warned PLO leader Yasir Arafat that if the conflict remained local, they’d lose. Join “the universal political struggle against colonialism and imperialism,” with the Palestinians as freedom fighters paralleling “Vietnam, Algeria, Cuba, and black Africa,” he advised.
(In this he was not the first, though. Fayez Sayegh, a Syrian intellectual who departed for the United States and completed his Ph.D. at Georgetown University in 1949, preceded him. Also an academic, his 1965 monograph Zionist Colonialism in Palestine stands as the first intellectual articulation of Zionism as a settler colonial enterprise, arguing that the analytical frameworks applied to Vietnam and Algeria apply equally to Palestine. The treatise situated Zionism within European colonialism while presenting it as uniquely pernicious.)
Israel’s post–Six-Day War territorial expansion helped Said frame Israel as “an occupying power” in a 1979 manifesto titled The Question of Palestine. Alleging racial discrimination as the key motive was a means of transforming the “Zionist settler in Palestine” into an analogue of “white settlers in Africa.” That charge gained traction in a post-Sixties universe of civil rights, anti-imperialism, anti-colonialism, and Western self-abnegation. The work sought to turn the tables on the prevailing American understanding of Israel: It is not, in fact, an outpost of liberal democracy or refuge from antisemitism, but an instrument of white supremacy.
Orientalism popularized a framework through which today’s advocates on behalf of Palestinians understand their struggle against the state of Israel and the West generally. Said casts the Western world as the villains of history and peoples of the East as its noble victims.
The essence of the book, Said concluded, is the “ineradicable distinction between Western superiority and Oriental inferiority.” It falsely affirms “an absolute and systematic difference between the West, which is rational, developed, humane, superior, and the Orient, which is aberrant, undeveloped, inferior.”
So it was impossible to take Zionism seriously as one among the myriad nationalist movements that emerged in the nineteenth century, much less to see Israel itself as a land of refugees or the ancestral homeland of Jews. And, indeed, Said’s Orientalism singles out Israel for special rebuke, suggesting that the state could be justified only if one accepted the xenophobic ideology at the core of Western civilization. Israel’s defenders, particularly those who lament the lack of democracy in the Middle East and fault Arabs for their militancy, represent the “culmination of Orientalism.”
Said is widely acknowledged as the godfather of the emerging field of postcolonial studies, and his views have profoundly shaped the study of the Middle East. Said also inspired – and in some cases directly mentored – a generation of anti-Zionist U.S. scholars whose dominance in the academic study of the area is unquestionable today.
The political left that emerged trained itself to read every conflict as the aftershock of colonialism. The ideological narrative of oppression and resistance allowed even the jihadist to become a post-colonial rebel.
It’s hard to overstate the academic influence of Orientalism. The authors note that “As of this writing, it has been cited nearly 90 thousand times. It is also the 16th most assigned text in the OSP database, appearing in nearly 16 thousand courses.” Orientalism is among the most popular books assigned in the United States, showing up in nearly 4,000 courses in the syllabus database. Said’s work appears in 6,732 courses in U.S. colleges and universities.
But although it was a major source of controversy, both then and now, it is rarely assigned with any of the critics Said sparred with, like Bernard Lewis, Ian Buruma, or Samuel Huntington. Instead, it’s most often taught with books by fellow luminaries of the postmodern left, such as Frantz Fanon and Judith Butler.
All these ideas are now embedded into diversity, equity, and inclusion identity politics, and “humanitarian” outrage over supposed Israeli “settler-colonialism,” “genocide,” and “apartheid.”
The ground for the massive pro-Hamas college and university encampments, and attacks on Jewish students, was prepared decades ago. The long march of progressives through American institutions over the past decades has taken its toll on society.
Henry Srebrnik is a professor of political science at the University of Prince Edward Island.
Features
Exchange Rate Factors: What Global Events Mean for Savvy Investors
When Russia invaded Ukraine in 2022, it created ripples in all financial markets, including currency markets. The Euro weakened while the dollar surged and emerging market currencies wobbled. Global factors can quickly affect financial markets and shake established trends. Apart from such rare events, currencies tend to change their price because of interest rates, inflation, and overall investor confidence. For investors managing money abroad, understanding these movements is critical to avoid losses and mitigate risks.
Below, we will break down how global political, economic, and cultural events influence exchange rates, with insights for savvy investors.
Economic factors
There are several key exchange rate factors with a consistent history of shaking financial markets. These factors include inflation, interest rates, trade balances, employment rates, and so on. Since economic factors are shaping markets almost daily, we start with those.
Inflation and interest rates
Inflation and interest rates are closely connected as one can easily affect the other. When inflation rises, central banks step in and raise interest rates to reduce inflation, and when inflation is lower, central banks can lower interest rates to make borrowing money cheaper. As a result, investors closely monitor these two metrics to anticipate changes in interest rates. Higher inflation makes currencies weaker, and whenever banks change the rates, the changes are immediately reflected in global currency rates. In the United States, the Federal Reserve is the central bank that sets interest rates in the country.
Trade balances and economic growth
A country that exports more than it imports has a stronger demand for its currency. More demand equals a stronger currency. However, the Japanese yen was always weaker against the dollar because the BOJ of Japan tends to have super low rates near 0 to support its exporters. Economic growth also increases demand for local currency as more investors try to invest in the country’s economy. Long-term investors often track this data to detect early signs of any changes in currency strength.
Political and geopolitical factors
Elections, sanctions, and overall political stability are also crucial factors. If the country gets under sanctions, its economy crumbles and its currency becomes inflationary, losing its value quickly. Elections are also crucial for a currency’s strength. Geopolitical events can have a serious impact on the currency as well. The most obvious example is the 2016 Brexit events that made GBP lose its value rapidly and violently. Global conflicts, such as wars, can seriously impact global financial assets, especially currency markets. When tensions are high, safe-haven currencies like USD and CHF (Swiss Franc) become very popular among investors as they seek a safe place to protect their capital.
Cultural and social factors
People like tourists, workers, and diaspora communities can shape currencies as well. Tourism usually drives seasonal demand, and countries that are popular destinations during certain seasons experience their currency appreciation as demand spikes. The perception matters as countries seen as safe and opportunity-rich tend to attract more investors, solidifying their currency strength.
Technology and innovation
Technology is seriously affecting everything, especially the financial sector. Digital payment systems, blockchain technology, and fintech startups have made it easy and swift to move money around. Cryptos and stablecoins enable investors to protect their capital using stablecoins during volatile times. The latest trend among banks is to work on CBDCs, which signals a new era where national currencies are blended with technology and blockchain. Despite this, currencies, even in their crypto form, will continue to be influenced by all major factors mentioned above, and knowing how these factors impact your currency is key to keeping your capital safe from risks.
Practical lessons for savvy investors
So, what do all these factors teach us about global currency rates and investing strategies? The key lies in proper preparations and anticipation. Monitoring macro trends, policy announcements, and major geopolitical and political developments is critical.
Diversify
The number one method which is used by professional investors is diversification. This simply means to spread your risks across a basket of assets. By not investing all your capital in one instrument, you can mitigate risks. If one asset experiences a loss, other ones will counter it with returns. Building a diversified portfolio is key to properly diversifying. For example: divide your capital to buy stocks, commodities, currencies, and cryptos so that if one fails to perform, others will counter it. This ensures a stable income without unnecessary losses in the long run.
Hedge
Forex options and ETFs are great hedging assets. Forex options let investors lock in an exchange rate for a future date, which is very useful if you expect volatility but want stability. Currency ETFs, on the other hand, track specific currencies or a basket of currencies and allow easy trading or protection without trading forex directly, but they are still risky.
Monitor the economic calendar
Economic calendar is a free online tool that aggregates important macroeconomic news data such as interest rate decisions, CPI, inflation, employment rates, central bank announcements and speeches, and other crucial information. By monitoring them, investors can always know when important news data will be released, and they can postpone their investment decisions to avoid volatile times and only invest after the main trend is determined.
Features
The Canadian Dollar is on a slow decline. Should you save in euros or US dollars instead?
The Canadian dollar has been losing its value against the dollar this year. For Canadians, this raises a simple question: if your CAD is losing ground, is it better to move savings into euros or U.S. dollars, especially bonds, stocks, or a carry-trade strategy? Carry-trade strategy in this context means to borrow in CAD and invest it in the USA or the EU zone. This is a complex matter, and to understand where the CAD is, how attractive other currencies might be, we need to analyze these currencies more deeply. Below, we will walk you through the data, practical costs, and risks so you can reach a usable conclusion after reading this guide.
Quick snapshot – What the markets say right now
Recently, the Canadian dollar has hit multi-month lows due to weaker oil prices and a post-Fed (U.S. Federal Reserve) market reaction (which raised the rates, making the CAD weaker against the dollar). Canada’s central bank has cut its policy rate to 2.25%, while the Fed’s fund rate remains notably higher at about 3.75-4%. The ECB (European Central Bank) main interest rates are lower than the Fed’s and near the low-to-mid 2% range. While the Euro currency to USD rates remain mostly predictable, due to higher US bond yield rates, the EUR remains stronger, still. The U.S. 10-year Treasuries are around 4.1%, Canada’s 10-year near 3.2%, and Germany’s 10-year around 2.7%, meaning that today the USD-denominated bonds have the highest nominal yield among the three. As a result, the dollar seems much more attractive when it comes to bond yields and stocks.
Bonds – Which currency is the best for fixed income?
The short answer is: USD bonds. When it comes to nominal yield alone, US bonds beat almost all other competitors. U.S. government bond yields (10-year) are noticeably higher than Canadian and German/Eurozone bond yields right now. As a result, US bond buyers have more income potential than Canada and the EU. Euro-area core yields are lower, meaning they are paying less than the USA.
However, nominal yield does not mean it is guaranteed real return, and metrics like inflation, currency rates, and hedging costs can impact potential returns directly. If you buy USD bonds but the dollar falls against the CAD, currency losses will most likely wipe out the higher yield rate. If the Fed lowers its rates, it will make the dollar weaker against the CAD and EUR.
Another challenge is that, if you live and spend in Canada, you are using CAD, and when exchanging it for dollars, you get exposed to foreign currency rate risks, which must not be underestimated.
Stocks – Euro or dollar?
Both the EUR and USD have their advantages. USD has strong liquidity and strong long-term performance, while EUR equities offer valuation opportunities and recent relative strength.
Why USD?
The U.S. market remains the most liquid stock market with strong earnings for many tech and large companies. This makes USD stocks very attractive for long-term-oriented investors. S&P has been rising historically, and even after crashes, it often recovers its value relatively quickly.
Why EUR?
European indexes have performed well this year and in many cases cost less than their U.S. counterparts. While cheaper does not always mean better, these indexes still have some growth potential. Some major banks in the EU zone, together with industries, have recovered strongly with a recent focus on military manufacturing, making many EU stocks very attractive, together with local indexes.
However, here is a caveat: if you are using CAD daily and it loses its value against the euro, the returns from euro holdings might shrink, exposing you to greater currency risks.
Carry-trade analysis – Is it viable to borrow CAD and invest it in USD or EUR?
The basic promise of carry-trade is simple yet powerful: you borrow cheaper currency and invest it in currencies with higher yields. In our case, is it lucrative to borrow in CAD and invest in either EUR or USD? To answer this question, we need to look at numbers. BoC policy rate is 2.25%, Fed funds from 3.75%, U.S 10-yr is 4.1%, Canada 10-yr is 3.2%. If we deduct Canadian rates from the U.S. rates, we get around 1.8% positive before costs. So, in theory, it could be lucrative to invest CAD in USD assets using a carry trade. Since the ECB has around 2%, it is not profitable to use a carry-trade strategy for the euro.
The bottom line
While the CAD has been weakening lately, it is still not cheap enough to naively invest in USD or EUR. However, if you want a pure yield and can tolerate foreign exchange rate risks, USD bonds are more attractive today. When it comes to stocks, USD equities provide stable and liquid markets. If you want valuation potential and diversification, then euro equities have become more attractive this year. When it comes to carry-trade strategies, the USD remains more lucrative than the euro, but on paper, traders and investors should evaluate all the risks and costs before investing in any currency.
In the end, Canadians who have CAD for their daily costs should be careful when trying to get exposure to other markets. US bonds, US stocks, US carry-trade, and EU stocks remain attractive choices for experienced investors.