Canadian dollar approaching parity with U.S. dollar

by albertacowpoke | October 13, 2009 at 11:19 am

906 views | 62 Recommendations | 26 comments

The Canadian Dollar is almost at par with the U.S. Dollar. It was up by 1.22 cents as of 11 am trading at 96.27 cents.

The Canadian Dollar has crept up over the summer from a low around 88 cents to it's present strength. Some experts predict that the Canadian Dollar will cost $1.10 to a U.S. Dollar by end January 2010.

Experts believe that contributing factors are the favourable figures are the surprising and healthy data on the Canadian economy. Rising oil prices have also contributed.

The U.S. Dollar is experiencing weakness against other world currencies.

A stronger Canadian dollar is a two edged sword. Goods manufactured and destined for export will be more expensive ashore, while imported goods will be more expensive.

The Canadian dollar is creeping closer to parity with the American greenback, trading at 96.97 cents US, up 1.22 cents, as of 11 a.m. Tuesday.

The dollar had slipped to 96.9 before the North American trading market's opening bell but it was expected to keep gaining strength as the value of the American dollar continued to plummet against other world currencies.

The weakness of the greenback drove the value of the loonie up from about 95.75 cents on Friday.

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Amy Judd

at 13:17 on October 13th, 2009

Perhaps a shopping trip is in order...

albertacowpoke

at 13:23 on October 13th, 2009

That would be Canadian stimulus for the American economy:)

sara star

at 16:07 on October 13th, 2009

Sounds pretty Loonie....

Rory Cripps

at 17:24 on October 13th, 2009

AMY: HA! I was thinking the same thing but unfortunately my American dollars are only worth as much as the rest of the American dollars! LOL!

Yuliya Talmazan

at 14:31 on October 13th, 2009

I feel that a high Canadian dollar does not do much for Canada when it comes to economic activity -- ultimately, we depend on the U.S. for trade, and having a high Canadian dollar does not help sustain the trade. I think Harper's government has to intervene.

albertacowpoke

at 15:11 on October 13th, 2009

It depends if you're exporting or importing. A lot of goods, especially in the auto industry are produced on both sides of the border. It makes exporting more expensive. Natural resources, based on US dollars will be less expensive, as will a lot of fruits and vegetables imported from California. It's a two edged sword. I doubt that you will see government intervention.

Rory Cripps

at 17:30 on October 13th, 2009

yuls. source: No need to worry! The drop in tourism will be more than offset by Americans buying up your currency. The political and economic structure of the Canadian government is such that the falling American dollar will benefit Canadian citizens in the short run.

René

at 14:42 on October 13th, 2009

Doesn't sound like US $ is in that much trouble.

Rory Cripps

at 17:31 on October 13th, 2009

Rene: No . . not at all! HA!

albertacowpoke

at 15:06 on October 13th, 2009

Thanks for commenting Rene. It depends on how much more diving there is. Not too long ago the Canadian Dollar was worth 66c U.S.

158

at 15:11 on October 13th, 2009

It would be nice to keep them at 1 to 1.

sara star

at 16:08 on October 13th, 2009

Especially when we change to the Amero-dollar

158

at 17:31 on October 13th, 2009

or when we change dollars.

Blue Crush

at 15:25 on October 13th, 2009

Although I thought "Yeah! Shopping time!" when I paid for EBay items today, I know it's not so good for our economy, and it's now worrying Ottawa.

"Too rapid a rise in the Canadian dollar is a risk to recovery," Harper told reporters, echoing similar remarks by Canada's central bank governor, Marc Carney.

albertacowpoke

at 15:38 on October 13th, 2009

Thanks for your comments Blue Crush. Trade with the US will definitely be affected, especially in the manufacturing industry. I think a lot of the jobs lost in that sector, however, have already been exported to regions in the world with lower labour costs.

It may be time to rethink our trade strategy. The world is changing.

sara star

at 16:06 on October 13th, 2009

Dollar demise means central banks will seek new currency in reserve, but not right away. This means the ruble will start to look stronger.

In the next few decades countries will be managing national currencies against those of their key trade partners, rather than with the dollar, expects Dr Gerard Lyons, Chief Economist at Standard Chartered Bank. However, there is no alternative for the dollar as the global reserve and trade currency at the moment, and it won’t appear for years to come.

Hugh Askew

at 16:22 on October 13th, 2009

Perhaps, unless the roooshians have problems larger than ours....and they do.

The_Cynic

at 16:24 on October 13th, 2009

Over 3000 people lost their jobs when the loonie was on a par with the US dollar - last thing Canada needs is parity. :(

Edit: That was in this part of the province.

caj1

at 16:26 on October 13th, 2009

Pardon my ignorance, but what is the loonie? The Canadian dollar?

albertacowpoke

at 16:30 on October 13th, 2009

Yes the one dollar coin.

albertacowpoke

at 16:31 on October 13th, 2009

The Bank of Canada can.t drop the interest rate any further.

marianmo

at 19:18 on October 13th, 2009

should go to the states again this weekend lol

Babel-Fish

at 19:33 on October 13th, 2009

I think we are at last see the correct value of the US$

PIM of SPAIN

at 09:23 on October 14th, 2009

Wisdom tells that the US$ is in a downward spiral and that most other currencies are strengthening. Whether people like it or not that is the economic fact of life. People who keep their house in order, - read maintaining a sound budget - are always richer than the ones that play around and are dishonest about their intention keeping the currency strong.

Yesterday I wrote:

Forbes also believes that there is no real benefit to a devalued dollar: “Whatever you gain on exports, you lose on the wreckage you’re doing on the rest of the economy.”

In a Bloomberg interview he was asked: what (Forbes) thought about the Treasury and Fed’s claim that they believe in a strong dollar:

•    “They’ve been saying that for years and the traders know that’s a wink and a nod for ‘just make it weak gradually’”.

Asked about opinion among international traders:

•    “There is very real concern about trade protectionism, that the US is not taking the lead, that these Chinese tariffs (on tires) just weren’t a small sop to domestic concern”.

•    “International trade partners are afraid that the US doesn’t believe in free trade anymore”.