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Prepare for revenge for all of those canadian-currency-value jokes.
Canadian Dollar Nears Parity With U.S. Buck
Wednesday September 19, 2007
CityNews.ca Staff
The Canadian dollar has become a lot like Star Trek - it's boldly going where few Canuck bucks have gone before. You may have been sleeping overnight, but the loonie wasn't. It briefly reached the 99 cent U.S. mark in overseas trading, before settling back to a still high 98 cents-plus reading against its U.S. counterpart. It closed at US98.74 cents on Tuesday, the highest final tally of the day since January 1977.
The surge came after the U.S. Federal Reserve cut interest rates by half a percentage point on Tuesday and world oil prices reached a new high. Analysts have been predicting for some time that the rampaging Canadian economy could see our dollar reach parity with the U.S. buck - something hasn't happened in decades. "At this level we'll see parity simply based on people's expectations that it'll hit parity," assures Dale Orr, managing director of Global Insight Canada.
Depending on who you are and where you are, that's either good news or disaster. Those traveling to the States on vacation this winter could wind up saving a lot of money. So could people who shop over the Internet at U.S. sites.
But manufacturers who export or sell goods south of the border will be hurt by the higher value. And at least one economic expert with close ties to unions worries about what it all means for jobs in this country. Economist Jim Stanford of the Canadian Auto Workers warns thousands of positions could be lost in the manufacturing sector if the dollar continues to fly high and U.S. industries lose the advantage of making their products north of the border. "There is no silver lining in this cloud, believe me," he adds. "There's no way Canada can succeed in world trade 10 or 20 or 30 years from now if we sit back and watch our whole manufacturing base wither away."
And our already lagging tourist industry could also be hit, as Americans stop getting a 'bargain' by coming to Canada.
Stanford would like to see the Bank of Canada emulate the U.S. Fed and cut interest rates here. But most analysts don't think that will happen, because the Canadian economy is outperforming its southern neighbour, inflation pressures remain strong and oil is staying high.
Wednesday September 19, 2007
CityNews.ca Staff
The Canadian dollar has become a lot like Star Trek - it's boldly going where few Canuck bucks have gone before. You may have been sleeping overnight, but the loonie wasn't. It briefly reached the 99 cent U.S. mark in overseas trading, before settling back to a still high 98 cents-plus reading against its U.S. counterpart. It closed at US98.74 cents on Tuesday, the highest final tally of the day since January 1977.
The surge came after the U.S. Federal Reserve cut interest rates by half a percentage point on Tuesday and world oil prices reached a new high. Analysts have been predicting for some time that the rampaging Canadian economy could see our dollar reach parity with the U.S. buck - something hasn't happened in decades. "At this level we'll see parity simply based on people's expectations that it'll hit parity," assures Dale Orr, managing director of Global Insight Canada.
Depending on who you are and where you are, that's either good news or disaster. Those traveling to the States on vacation this winter could wind up saving a lot of money. So could people who shop over the Internet at U.S. sites.
But manufacturers who export or sell goods south of the border will be hurt by the higher value. And at least one economic expert with close ties to unions worries about what it all means for jobs in this country. Economist Jim Stanford of the Canadian Auto Workers warns thousands of positions could be lost in the manufacturing sector if the dollar continues to fly high and U.S. industries lose the advantage of making their products north of the border. "There is no silver lining in this cloud, believe me," he adds. "There's no way Canada can succeed in world trade 10 or 20 or 30 years from now if we sit back and watch our whole manufacturing base wither away."
And our already lagging tourist industry could also be hit, as Americans stop getting a 'bargain' by coming to Canada.
Stanford would like to see the Bank of Canada emulate the U.S. Fed and cut interest rates here. But most analysts don't think that will happen, because the Canadian economy is outperforming its southern neighbour, inflation pressures remain strong and oil is staying high.
Time to move my savings from an American to a Canadian bank. 
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