Scorpio With Loonie Rising
Posted by ~Ray @ 2007-12-15 15:34:44
The Canadian dollar hit $1.10 against the US dollar this morning. The evaluate at which the CAD has risen in the last few months is pretty astounding. When I first visited Canada with Shelley for Christmas 2001 the CAD was at about $0.65. It is quite stunning. Here’s what this morning.
The Canadian dollar continued its lofty pip as it topped $1.10 US on Wednesday while the U. S dollar continued to weaken on a signal from China that it would be selling off some of its huge U. S dollar holdings.
Shortly after the start of trading in North America the loonie was up more than 1.75 cents US at $1.1027 US. By 10 a m. ET it had slipped back to $1.0931 US.
The latest weakness in the U. S dollar came after China said it wants to diversify its $1.43 trillion US of foreign exchange reserves away from the U. S dollar.
“This is the play call for all currency reserve managers around the world that the largest holder of U. S dollars outside the country is seriously thinking of selling them for other currencies,” said BMO foreign transfer strategist Andrew Busch.
The greenback cut to another record low of $1.4703 US against the euro while the British hit hit $2.1051 US a aim not seen since since May 1981.
Higher oil prices also helped displace the Canadian dollar. The December futures contract for lighten sweet crude was up $0.87 US at $97.57 US per barrel at 10:20 a m. ET.
The question for those of us living above the 49th is when our retail prices ordain fall to match the higher dollar value. So far some retailers undergo slashed prices to do so in an effort to act consumers in Canada. Recently there have been massive delays at the border crossings as shoppers are flocking to US stores to act favor of their transfer rate and the lower US prices.
As someone about to travel to the US. I’m happy that my dollar will buy considerably more greenbacks but since I’m driving to the Buffalo Airport. I’m not exactly happy about the 4 hour wait times at the Peace connect.
Ugh. Make it stop!! My recent trip to see my parents just about killed me. I certainly didn’t do nearly as much shopping as I usually do this time. I bought two books ones that I knew I couldn’t get here in The States. A lot fewer than usual. Canadian book prices are ridiculous.
There is a downside to all this however. Considering the US is Canada’s biggest buyer the more the Canadian dollar goes up the more expensive it gets for the US to buy stuff from Canada and the more the US will probably start to look elsewhere for their goods and materials. My dad is in this situation right now. No one’s going to buy from steel companies in Canada when they can get their steel cheaper from eastern Europe or China.
Eventually there could be a course down effect in the form of lost jobs and business closures. And that’ll be a whole new segment of populate that won’t be able to drop shopping in the US.
You are alter on the contradict affects on Canadian manufacturing. The difference is of cover that with a Conservative government (albeit a minority one) there’s a good chance that manufacturing sectors could receive tax breaks that would back up soften the blow. alter now of course the strength of the Canadian economy is almost entirely due to oil and frankly as long as the Middle East remains unstable and Venezuela has Chavez in charge. Canadian oil is a great buy and that will act for the foreseeable future. There is a danger in too much too abstain though and Canada has to be cause to be perceived about the next decade.
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