Canadian dollar almost at parity with US, will pass it soon

[Sharpe]

The thing I am interested is if the CDN dollar hits 1.05 USD, which has never happened. It's been at par before but never that high.

The Canadian dollar has seen some steep ebbs and flows in its history. In 1864, the greenback traded at $2.78, an all-time low for the U.S. currency. In 2002, by contrast, the loonie traded as low as 62 cents.

From: https://www.reportonbusiness.com/ser...y/robNews/home

(Admittedly I suspect that is from a fixed and not from a floating currency system that we have now, not sure if they had that back then )

[Kidlicious]

Originally posted by Ben Kenobi
That to me says, that if I hire an american or a canadian to do the same work, that I should expect the canadian to produce 80 to 85 percent of the work done by the average american.

That's wrong. Productivity doesn't really mean that. And the figure is probably like 50 percent.

[notyoueither]

Originally posted by Tingkai


One of the concerns is that the strong Canadian dollar has been driven by Canadian oil sales and U.S. monetary policy so that the exchange rate does reflect the cost of doing business, but instead distorted to favor American businesses.

A 35% change in the exchange rate during the past four years is not normal given comparative inflation rates, tax policies and economic growth in the two countries.

There is more to it than that.

This is not abnormal, and it is not all about oil.

Originally posted by Kuciwalker
I'm curious: is there any economic reason that just using the USD as your currency would be a bad idea?

It would be surrendering control of monetary policy and control of our economy to furriners.

There are many times we need different policies than the Fed would set for NY and CA.

We don't have identical economic needs.

Originally posted by Kuciwalker

Originally posted by Kontiki
You mean besides the end of independent monetary policy?

The American states get by just fine without independent monetary policy. Ideally, trade between the US and Canada should be as free as interstate US trade.

But it isn't.

Originally posted by Kuciwalker

Historically we have done most of our trade with Britain. Mattered much more the relationships with the Pound and not the US dollar.

Not recently. We buy 85% of your exports.

It is a recent trend. I was alive when the UK joined the Euro Common Market and had to make concessions that led Canada to examine our trade relationships and priorities.

Europeans could be major buyers for what we have to sell any time they so choose.

[Tingkai]

Originally posted by Wezil
Yes the crutch is gone.

Why do you think it was a crutch?

Business costs in Canada are higher than in the United States, mainly because of different tax structures. The Canadian dollar at 75 cents U.S. reflected that cost.

What we are seeing now is an artificially high Canadian dollar that provides a crutch to U.S. companies.

[Kuciwalker]

It is a recent trend. I was alive when the UK joined the Euro Common Market and had to make concessions that led Canada to examine our trade relationships and priorities.

Yes, but you're really old

Europeans could be major buyers for what we have to sell any time they so choose.

... but why would they choose?

It would be surrendering control of monetary policy and control of our economy to furriners.

That's not an economic reason.

There are many times we need different policies than the Fed would set for NY and CA.

We don't have identical economic needs.

Neither do different US states, but nobody seems to question the economic benefits of the Union.

[Kuciwalker]

But it isn't.

Duh?

[Tingkai]

NYE, oil is certainly a factor influencing the rise of the Canadian dollar, but as I said, there are other factors.

Unfortunately, with a minority government, the Canadian dollar will be kept high even though it hurts the economy because most Canadians would not understand why a lower Canadian dollar is more beneficial to them. Most probably think it is great that the dollar is at par like the idiotic Globe headline: Strong currency, proud currency.

[Kuciwalker]

The Canadian dollar is most beneficial to Canadians at the price the market sets.

[Tingkai]

Good one Kuci

[RGBVideo]

Originally posted by Tingkai
the Canadian dollar will be kept high even though it hurts the economy because most Canadians would not understand why a lower Canadian dollar is more beneficial to them.

"would not understand" is a good choice of words from your perspective.

[notyoueither]

Originally posted by Tingkai


Why do you think it was a crutch?

Business costs in Canada are higher than in the United States, mainly because of different tax structures. The Canadian dollar at 75 cents U.S. reflected that cost.

What we are seeing now is an artificially high Canadian dollar that provides a crutch to U.S. companies.

I don't know if that is entirely true when you consider top employers.

Add health care costs to US employer costs. Those are taken care of by our taxation system where they are not in the US. Ask GM about it.

[Kuciwalker]

GM is a special case. (Well, there are many other businesses in the same boat, but it's not a general issue.) It's not really related to the marginal cost of new labor in the US.

[notyoueither]

Originally posted by Tingkai
NYE, oil is certainly a factor influencing the rise of the Canadian dollar, but as I said, there are other factors.

Unfortunately, with a minority government, the Canadian dollar will be kept high even though it hurts the economy because most Canadians would not understand why a lower Canadian dollar is more beneficial to them. Most probably think it is great that the dollar is at par like the idiotic Globe headline: Strong currency, proud currency.

I am not convinced we need a lower Canuck buck.

We built the auto plants in an era of an over par Canuck buck.

The last 20 years and a 0.65 cent dollar at the nadir were a function of adjustment to new trading patterns. Between 1970 and now our focus shifted from the CW to NA.

Canadian workers can compete with any other industrialised country. What we need are businessmen who are not lazy and grown obese banking on a diet of cheap Canadian labour.

[DAVOUT]

Originally posted by notyoueither


I am not convinced we need a lower Canuck buck.

We built the auto plants in an era of an over par Canuck buck.

The last 20 years and a 0.65 cent dollar at the nadir were a function of adjustment to new trading patterns. Between 1970 and now our focus shifted from the CW to NA.

Canadian workers can compete with any other industrialised country. What we need are businessmen who are not lazy and grown obese banking on a diet of cheap Canadian labour.

The German's performance in exports with the euro at its highest tends to show that the current account balance is more related to the content of the exports than to the currency rate.

[notyoueither]

Originally posted by Kuciwalker

Europeans could be major buyers for what we have to sell any time they so choose.

... but why would they choose?

Same reason your guys agreed to CanUS FT.

Preferential access to our resources.

Safe energy, food, minerals, and other raw materials like wood... in great abundance.

How valuable is that?

The dumbest thing the pointy heads in Brussels ever did was force the UK to choose instead of bringing Canada, Australia, and others along when the UK joined the EC.

It would be surrendering control of monetary policy and control of our economy to furriners.

That's not an economic reason.

There are many times we need different policies than the Fed would set for NY and CA.

We don't have identical economic needs.

Neither do different US states, but nobody seems to question the economic benefits of the Union.

We don't have a union.