Canuck Buck on Par with US Dollar as Commodity Prices Rise
L I N K It’s a good day to go cross border shopping as our Canadian Loonie is buying more in the US. The Loonie is almost on par withe the US dollar. Fueled by high oil prices and a declining US dollar the high loonie hurts employment in Canada.
“Canadian Prime Minister Stephen Harper said yesterday in remarks to reporters in Toronto that he shares Bank of Canada Governor Mark Carney’sconcern that gains in the country’s currency could slow recovery. Carney said in a speech on June 4 that a persistently strong Canadian dollar would “work against” positive factors such as improved trade.”
For Snow Birds it’s going to be a good winter as their dollar will buy a bit more than last year.
Will you be doing more cross border shopping Cornwall?
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The ability to purchase goods or services for less money leaves more to spend on other goods or services, or to save which will help future productivity.
Moreover, don’t Canadian companies buy from US companies, thus allowing them to lower prices and sell more goods and services, or increase profits which allow more growth when the loonie is high compared to the dollar?
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Rezrevolt,
You make valid points, but a lot depends on what currency you are using as the medium. A couple years ago when the Cdn dollar went above par I worked for a company who purchased their main raw materials from the US dollars, but we turned around and sold these goods back to a US company in US dollars. They were by far our largest customer and the problem was wages, the lease and other raw materials all had to be paid in Canadian dollars. Yes there are ways around these problems, but when you have currencies making wild swings like the US dollar is now it is difficult to plan ahead and difficult to come to long term agreements.
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Well yeah, that’s the inherent problem in centrally controlled fiat monetary systems. The interest rate and supply is manipulated by central planners, not the market. Would that there were a market based alternative.
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If there were a market based system you’d have the chaos that was the oil surge of over a year ago. You’d essentially have manipulated chaos. In the current system there’s still manipulation; it’s just not as chaotic.
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DDear Sir, Congratulations on your discussion (a blog?) of 3 days ago on the effect of a higher Cdn $ on our economy. One of the few discussions that rise above the usual drivel I am forced to read.
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