I get emails all the time from readers that say, “Okay Chuck, you tell us to diversify, but you don’t tell us what to buy!”

Well to the untrained eye, that may be true. But long-time readers here in FX University know better… So, keep reading, and it will hit you right between the eyes one day, and you’ll slap your forehead and say, “I should have had a V-8!”

The boys and girls over at Citigroup have written a letter to their clients telling them that, “the dollar is weakening because foreign central banks are diversifying their reserves and U.S. investors are buying high-yielding emerging market assets.”

They went on to say that, “The Australian and Canadian dollars are likely to rise to parity against the U.S. currency.”

So, there’s one more on the roster who believe Aussie dollars (A$) and loonies will go to parity against the dollar. The loonie isn’t exactly the same stretch of a forecast as the Aussie dollar, as loonies are almost 97-cents right now, with Aussie bucks trading near 93-cents.

But honestly, doesn’t that make sense given the talk we just had about hyperinflation? After all, what currencies are going to help protect you against hyperinflation?

The Commodity Currencies! Aussie dollar, New Zealand dollar, Canadian dollar, Norwegian krone, Brazilian real and you can even throw in the S. African rand, for those that like rides on Mr. Toad’s wild ride!

In other news, the Bank of Canada (BOC) meets today. I still believe that the BOC will remove their statement about interest rates remaining on hold until the second half of 2010. Now I can hear all the naysayers out there saying, “Canada’s economy is in no shape to withstand a rate hike.”

So hear me out on this… I’m not saying that the BOC will hike rates now, or even in 2009. But, if Canadian energy prices of oil, natural gas, and coal continue to get stronger, I’m afraid the BOC will have to entertain thoughts of raising rates to fight inflation. Not now, but sometime soon.

And once again, the loonie is just one of the six hyperinflation currencies that could be on the rally tracks soon. Stay tuned.

That’s it for today! Have a Terrific Tuesday!
Chuck Butler