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Forex Trading in Canada vs Trading in the US

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With forex trading gaining popularity globally, Canada and the US are not any different. The two markets are close by and might target the same clientele but do have some minimal differences.

 

The major difference might be that the Canadian market might involve a list of small companies that make up the capital marketplace. In contrast, the US markets are larger with more sectors and companies of investors.

The legality of forex trading in the US

Forex trading is legal in the US, but it is different from trading on any other continent. Different rules govern the US compared to any other country, but it does not mean it is illegal in the US. Forex trading is allowed in all countries whose currency is used for force trading, and the US dollar is one of them.

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The legality of forex trading in Canada

Forex trading is illegal in some countries, as some people have termed it as a form of gambling. In Canada, force trading is legal, and people can trade as much as they want to so long as they work with forex brokers that accepting Canadian clients.

Forex trading regulations in the US

Forex trading regulations in the US are some of the strictest. With its economy being one of the most advanced and having a huge responding customer base, it is unusual to see a few forex traders compared to the size of the market.

 

Traders are, however, not restricted if they meet all the requirements, which includes a license and a capital holding minimum that is so high for many people to operate there. The brokers must get an operating license and a twenty-million-dollar security deposit. Regulations are conducted by the United States Commodity Futures Trading Commission.

Forex trading regulations in Canada

Regulations are important to protect citizens and the entire country against fraud cases. The Canadian financial market is regulated, but most brokers prefer to set up their operations in a different place and then attract Canadian traders. The type of regulations differed in every province and territory, and the legislation derivatives apply on top to the federal regulations.

 

It, therefore, creates a challenge to the broker or an advisor as Canada lacks universal regulations. Canada has over 15 regulatory bodies which regulate the forex market. Brokers or investors who want to offer financial services should be registered with the investment industry regulatory organisation of Canada

Conclusion

Canada and the Us do not have very different leverage & margin rules since they operate under a leverage limit and margin level of 50:1. A lower margin rate equates to a higher leverage ratio.

 

It is important to ensure that while trading in both countries, you may take it up yourself to look for a regulated broker to ensure that your capital is more secure. If you want to work with an offshore company, check the leverage levels with the home country’s regulatory body.

 

In Europe, for example, the leverage limits are 30:1. If the leverage limits do work for you, then you can continue with your trade.

Investment

Pension funds suffer largest investment losses since 2008 financial crisis

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Canadian defined-benefit pension plans collectively suffered their largest losses since the 2008 financial crisis in 2022, recording a median decline in assets of 10.3 per cent despite a partial recovery in the final months of the year, according to a survey from Royal Bank of Canada RY-T.

Pension assets suffered heavy losses in the first two quarters of 2022 before starting to recover in the back half of the year. In the final quarter, pension assets returned 3.8 per cent, as measured by the RBC Investor and Treasury Services All Plan Universe, which serves as a benchmark for performance.

Pension plan investors were battered by unusually volatile markets driven by high inflation and rapidly rising interest rates, as both stocks and bonds returned losses, instead of helping offset each other as has often been the case in past market downturns. And although plans earned positive returns to finish the year, they are facing many of the same pressures in 2023.

“In the next few months, plan sponsors will need to be attentive to risk factors such as the economic impact of the central banks’ actions, ongoing geopolitical tensions and ongoing efforts to contain the COVID virus outbreak in certain emerging markets,” Niki Zaphiratos, managing director for asset owners at RBC I&TS, said in a news release.

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Canadian pension plans’ bond portfolios had median losses of 16.8 per cent in 2022 – the largest annual decline in more than 30 years – and also trailed the benchmark FTSE Canada Bond Index. The losses were driven by the drastic action central banks took to tame inflation by raising interest rates, with longer-duration bonds that are most sensitive to inflation accounting for some of the largest declines.

Yet for pension plans, there was a silver lining to rapid interest-rate increases, which caused future liabilities to fall. As a result, more pension plans finished 2022 in surplus, meaning their assets were greater than their liabilities. And higher yields from fixed-income securities could also give pension plan investment managers more options to reduce risk-taking in their portfolios over the coming year.

Stocks also suffered, rather than acting as a counterweight to falling bond prices. Foreign equities returned 9.7 per cent in the fourth quarter, but closed the year down 11.3 per cent, according to RBC I&TS. And Canadian equities returned 6.3 per cent in the final quarter of the year, bringing their annual loss to a comparatively modest 3.6 per cent. In general, value stocks performed better than higher-risk growth stocks in the quarter.

The last time pension assets declined so sharply was in 2008, when Canadian defined-benefit pension assets posted a median loss of 15.9 per cent.

Defined-benefit pension plans pay fixed benefits for as long as a beneficiary lives based on their contributions and years of service.

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Intel Cuts Pay Across Company to Preserve Cash for Investment

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(Bloomberg) — Intel Corp., struggling with a rapid drop in revenue and earnings, is cutting management pay across the company to cope with a shaky economy and preserve cash for an ambitious turnaround plan.

Chief Executive Officer Pat Gelsinger is taking a 25% cut to his base salary, the chipmaker said Tuesday. His executive leadership team will see their pay packets decreased by 15%. Senior managers will take a 10% reduction, and the compensation for mid-level managers will be cut by 5%.

“As we continue to navigate macroeconomic headwinds and work to reduce costs across the company, we’ve made several adjustments to our 2023 employee compensation and rewards programs,” Intel said in a statement. “These changes are designed to impact our executive population more significantly and will help support the investments and overall workforce needed to accelerate our transformation and achieve our long-term strategy.”

The move follows a gloomy outlook from Intel last week, when the company predicted one of the worst quarters in its more than 50-year history. Stiffer competition and a sharp slowdown in personal-computer demand has wiped out profits and eaten into Intel’s cash reserves. At the same time, Gelsinger wants to invest in the company’s future. He’s two years into a turnaround effort aimed at restoring Intel’s technological leadership in the $580 billion chip industry.

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Gelsinger will keep using cash to reward shareholders, meanwhile. Intel said last week that it remains committed to offering a competitive dividend. Analysts have speculated that the company may lower its payout to cope with the slowdown.

Under Gelsinger’s plan, the company is looking to introduce new production technology at an unprecedented pace. It will also build new plants in Europe and the US and try to win orders from other chipmakers as an outsourced manufacturer. That move will put Intel in direct competition with Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., two Asian companies that have passed it in the rankings of chipmakers by size and capabilities.

Intel isn’t the only big company trimming executive pay. Apple Inc., one of the few tech giants to forgo major layoffs, is cutting the pay of CEO Tim Cook by more than 40% to $49 million for 2023. Some high-profile finance firms have made similar moves, with Goldman Sachs Group Inc. CEO David Solomon seeing his 2022 compensation trimmed by about 30% to $25 million.

Intel is taking other steps to rein in expenses. That includes headcount reductions and slower spending on new plants — part of an effort to save $3 billion annually. That figure will swell to much as $10 billion a year by the end of 2025, the company has said.

Intel, which informed staff of the latest cutbacks earlier Tuesday, is also reducing the match it offers to pension contributions. The Santa Clara, California-based company thanked employees for their patience and commitment.

Hourly workers and employees below the seventh tier in the company’s system won’t be affected.

(Updates with spending plans and earnings report starting in fourth paragraph.)

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Lithium Americas stock rises on GM’s $650 million equity investment

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Lithium Americas Corp.
LAC,
+13.19%

stock was up 9.2% in premarket trading Tuesday after it said General Motors Co.
GM,
+8.14%

agreed to invest $650 million in the company to help develop Nevada’s Thacker Pass mine, the largest known lithium source in the U.S. Lithium Americas said the project would create 1,000 jobs in construction and 500 in operations. It would produce lithium for up to 1 million electric vehicles (EVs) a year. Lithium from Thacker Pass will be used in GM’s proprietary batteries for its EVs. “Direct sourcing critical EV raw materials and components from suppliers in North America and free-trade-agreement countries helps make our supply chain more secure, helps us manage cell costs, and creates jobs,” GM CEO Mary Barra said. Thacker Pass is scheduled to go into operation in the second half of 2026, the companies said.

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