US dollar reaches parity with Canadian

The US dollar and the loonie were trading one-to-one on Thursday. The US and Canadian dollars haven't been on par since 1976. [AP]

Comments

[swampcracker]

Next stop: A crisis in servicing the U.S. sovereign debt.

[Count Zero]

Just shows how badly our economy is tanking. Next stop....the parity with the Peso.

[madmatt]

All those loonies and twoonies I collected as a bartender are now actually worth something....with the dollar diving I may have an investment I can understand.

[Count Zero]

Now's a great time to start buying the Euro. Dick Cheney sure has.

[David Grenier]

I wonder if it stays like this if it will eventually hurt Canada's economy. Supposedly one of the big reasons for many American companies doing business in Canada (for example, Hollywood practically relocating to Vancouver) is that the exchange rate made doing business so much cheaper there.

[Lindsay Beyerstein]

The relatively strong Canadian dollar has been hurting movie industry in British Columbia. I'm sure it's bad for Canada's exporters of natural resources. The US buys a lot of Canada's exports, and it can't be good for business to have the goods become more expensive for Americans. Tourism from the US is probably suffering, too.

Personally, I resent the weak American dollar because it means I can't be a high roller when I go back to Vancouver for vacations.

[voxy]

Totally. Visiting the less well-off, the riff-raff still serving the crown.

I can hardly wait until it's over ours. I'll never call there again .... (justkidding)P If you've seen the jpg that displays canada over the us with the caption that says: "IF we were in prison you'd be our bitch" ..... I actually had to send that to my best friend in canada. she'd never seen it or was too polite to say so. lol !!!!!!
I hope they'll be kind to us. I agree that the next stop is the peso.
Thanks George !!

[Lesley]

It won't last long. The Canadian economy depends on its dollar staying low, and besides, few Canadian consumers are benefiting at home. Prices are still 30% higher for everything you buy here.

[Bruce]

80-90% of the Canadian population lies within 150 miles of the border. I predict a massive increase in cross-border holiday shopping - goods flowing north, this time - if this keeps up.

To some extent the motivation to buy south and ship/haul/smuggle north will be motivated by the irrational focus on the parity of the units, and reinforced by 100 millions jokes about the Yank peso. My hope is that some nice Canadian visitors will take a liking to seafood and spend piles of their filthy lucre here in Baltimore, we could use the cash. It's actually fairly pleasant here between the end of September and (U.S.) Thanksgiving.

[The Phantom]

It seems always that things cost more in Canada, and I'm not sure why.

My aunt used to be friends with some French Canadians who worked in NYC. Who told of the many thrifty Quebeckers who used to take the bus down to NYC, for Christs sake, for the sole purpose of shopping.

I occasionally buy 24 ounce "oil cans" of Molson Ice, at $1.59 at my neighborhood Korean deli. I hope that Molson will eat the exchange rete difference for this essential life product.

[Anacher Forester]

I never thought I'd live to see the day.

AF

[Left_Wing_Fox]

Remarkably, the Canadian economy is still doing well in many sectors. There's a few reasons for this.

First of all, the Economy in Canada has shifted away a great deal from manufacturing ; we now import much of our goods from China, much like the US. Canada is also exporting much more to Europe now, and the relative value of the Canadian Dollar to the Euro hasn't changes nearly as dramatically as the relationship with the dollar.

In addition one of the major driving forces in the Canadian Economy has been the high price of oil, making northern Alberta an economic hotspot. That's not affected much by the US Dollar, since demand is so high.

Also, the Canadian housing market hasn't been affected the way the US market has by low rates and predatory lending. Because of the Alberta oil boom, there's a thriving housing and construction market there that is being spurred by genuine demand.

If the housing market in the US goes boom, there's almost no way canada won't be affected substantially. But for now, our economy is more robust than it has been, and is less dependent on the US right now than it has been historically.

And BTW The Phantom: That Molson product you're drinking is owned by the Coors family. Despite the label, I think it's brewed domestically now. Canada has much higher taxes on alcohol, cigarettes and gasoline anyways, which may explain much of the price difference.

[Left_Wing_Fox]

BTW, When I moved to the United States in Nov. 2000, the US dollar was worth 1.60 Canadian.

[herbert browne]

(leftwing fox) .."Because of the Alberta oil boom, there's a thriving housing and construction market there that is being spurred by genuine demand.."-
Bingo... and don't count out the natural gas- a growing part of U.S. electric generation, these days (& feedstock for fertilizers, etc). The softwood exports may slow down... giving the environment a breather up Nawth (and perhaps breathing new life into the project to make common cross-border parkland in the range of the woodland caribou). That beautiful multilingual $2. bill that I've carried around since the last century ("so long, Chilliwack!") gains weight, even as it grows lighter... ^..^

[Anna Coulling]

As a full time currency trader based in the UK and working for myself, I thought I would add my thoughts to your post. I trade the USD/CAD pair a great deal and have studied the Canadian economy in detail, so I hope the following is useful. Six years after it hit an all time low in 2002 the Canadian dollar has since gained almost 40% against the US dollar and the question everyone is asking is whether this trend will continue, and if so for how much longer. On the economic front, the data presented by the Bank of Canada has continued to indicate a slowdown in growth particularly in the manufacturing sector. Canadian job prospects remain good, which would suggest that the economy is resilient at present to any slowdown. However, with the possibility of a full recession in the US, then further slowing of the Canadian economy is inevitable. In recent months the combination of favourable inflation figures and evidence of weaker growth will, I believe, encourage the Bank of Canada to cut interest rates to follow those in the US, but that these cuts will be small to avoid the possibility of increasing inflationary pressures in the economy. Overall, I believe that the Canadian dollar is unlikely to weaken sharply against the US dollar, but the current position of parity may be difficult to sustain in the longer term and a move back to around 1.10 or 1.15 would seem the most likely target. If resistance is penetrated at 1.15 then the Loonie could weaken further.