CDN Dollar Vs. US Dollar

[max_boost]

For you economist out there, will the CDN dollar continue to appreciate relative to the US? What trends do you see? Or will the CDN dollar begin to depreciate? What factors will contribute to these things? A revived US economy? Stabilization in Iraq? Bush venturing in to Alaska for Oil/Energy?

Reason I ask, what if the dollar continues to appreciate and gets to $0.90? Is that possible? In that case, why would anyone still buy a car in Canada when you can go down South and save thousands, after taxes, shipping etc. Or even just buying goods i.e electronics, clothes etc.

Let's hear your responses!

:thumbsup:

[shadow]

Some economists were predicting around 85 cents although the prediction may be higher now.

It is high now and you are correct the high dollar steers money away from Canada... but that will eventually cause our dollar to drop.... thus causing more foreign investment.... which causes our dollar to rise.... and I think you get the picture...

It will be interesting to see how high it goes though..... maybe we should place bets hehe. =D

[Weapon_R]

It's not going to climb forever. A high dollar kills our economy. But buy on ebay while you can :D

I think that the reason the dollar rose so high was because of the U.S. elections. No one was paying enough attention to the devaluation of the US currency, but now that things have settled down, look for a decrease.

[Chandler_Racing]

My econmics prof. was saying the canadian dollar was going to continually increase in respect to the american dollar. He also mentioned that the US proposed to devalue their dollar by 20% which i believe was denied.

[Weapon_R]

Originally posted by Chandler_Racing
My econmics prof. was saying the canadian dollar was going to continually increase in respect to the american dollar. He also mentioned that the US proposed to devalue their dollar by 20% which i believe was denied.

Which professor is this? Again, Canada should never allow its currency to get this high. It really is bad.

[JordanLotoski]

i sure hope the canadain dollar drops...keeps our econemy stable...it shold be fixxed at 50 cents

[Chandler_Racing]

Might sound bad but i actually dont know his name. He never said it was what he wanted, but what is most likely to happen, why i didnt ask.

[kenny]

While currency trends can change with a single major headline, the trend is for it to continue rising against the US dollar. Personally I think it'll continue to creep up until the situation in Iraq is more stable, it will probably peak out at $0.90US and fall once they have the elections in Iraq.

Who knows?! haha I have an econ degree but like the saying goes C's for Degrees! hahah :rofl:

[max_boost]

If it does reach $0.90 US I'm going to hit the bank and buy as much US dollars as I can afford :D

[JAYMEZ]

I believe it is still going to go up , I like it this high , I can actually afford things out of Canada. I mean being born in England , visiting there is hella exspensive

[Weapon_R]

Originally posted by JAYMEZ_STi
I believe it is still going to go up , I like it this high , I can actually afford things out of Canada. I mean being born in England , visiting there is hella exspensive


But how does that help you with the English pound?

[eb0i]

Personally I hate the high value of our CAD compared to the USD. A lot of my savings are tied up in USD and at present when I exchange it for CAD I feel like crying.

[Singel]

I'm goin to the Dominican on boxing day...not sure exactly when i should go get US$$$. Might give it another week or two :dunno:

[benyl]

Remember that it is the US dollar that is going down compared to everyone. The Canadian Dollar is the same relative to other currencies, most importantly the euro.

I am in LA right now and I am going on a shopping spree! Strong Canadian dollar make my buying power strong.

The US went before the WTO or the G8 and asked to devalue the currency by 20%. They were denied. So what they are doing now it just letting it slide.

Reason? They want to be able to competitive with their exports to kick start their economy. Look at the crazy incentive the car manufacturers are coming up with. Remember that the car industry drives the US economy. If the Big 3 are in the toilet, so is the ENTIRE US economy.

[E36M3]

Benyl is right about the reason the US is devaluing the dollar. Basically, they are sending a powerful message to China (who has a controlled currency, the RMB and has artificially kept the value low to increase exports). Without China reducing currency controls and allowing their currency to get closer to its market value, the US has little choice but to devalue the US Dollar. It should be interesting to see what happens.

Keep in mind that the efficient market hypothesis takes all these points into account -- ie. the current value should be indicative of these and other important trends. In either case, it is awesome to see the USD slip against the British Pound :)

[max_boost]

A little OT then, why the hell is the British pound worth so much?:dunno:

[sputnik]

Another thing to consider.

A high dollar can increase inflation. The Bank of Canada likes to keep inflation around 2% and if it goes up over 2% they increase interest rates to push it down.

So there is a chance that gone will be the days of <4% mortgages. Lets hope we dont repeat the early 80s (18-20% mortgage rates).

[Khyron]

What years were it back when the Cdn dollar was worth more than a US dollar? Great for tourists going to the US, but shit for everyone else. Though if interest rates creep up to 8 or 9%, there's gonna be some real sweet forclosure incentives waiting for us. :D

Khyron

[E36M3]

They aren't a huge producer of exports, so my guess would be that they haven't had to devalue their currency as a result. They depend on a strong currency to buy things for their country (they are a small island so they import a ton of crap) so it is in their best interest to keep it strong. They've kept off of the Euro for this reason.


Originally posted by max_boost
A little OT then, why the hell is the British pound worth so much?:dunno:

[awd]

For every 1 cent our dollar rises, ~1000 canadians become unemployed.

It is not a good thing.

[hjr]

Originally posted by Weapon_R


Which professor is this? Again, Canada should never allow its currency to get this high. It really is bad. it is quite bad. canada is a net exporting country (we export more than we import). The high canadian dollar is hurting these exports cause they are simply more expensive than they used to be. in some cases more so than compairative products from elsewhere (mexico). The dollar is great for the ebay folks, but our economy doesnt like it. It hasnt really shown yet, but it will.



Originally posted by JAYMEZ_STi
I believe it is still going to go up , I like it this high , I can actually afford things out of Canada. I mean being born in England , visiting there is hella exspensive unfortunately it doesnt work that way. the value of each currency against another technically doesnt have anything to do with how it is valued against a third currency. so just because we are up on the us dollar, dont expect us to be up on the pound.
i did a little checking and over the last 2 years the cnd dollar has sat at about 2.2:1 (GBP:CND D) to 2.50:1. At this time it is actually down at 2.042:1. It has been near this value at a few points at near the same time in the year for the last 2 years.

[JustinL]

Over the past 3 months, the Canadian dollar has been doing very well against many other currencies, not just the USD.

http://www.bankofcanada.ca/fx/iexe0102.gif
http://www.bankofcanada.ca/fx/eurocae01.cl.gif
http://www.bankofcanada.ca/fx/iexe1401.cl.gif
http://www.bankofcanada.ca/fx/iexe0701.cl.gif
http://www.bankofcanada.ca/fx/iexe1201.cl.gif

[syeve]

An op-Ed in the post quoted a government offical (economist of course) suggesting the canadian dollar would be $1.06 in five years because of the us debt freezing fiscal actions.

[2002civic]

my econ prof predicts it will hit .90 cents in the next cpl months(6ish)

[Xtrema]

That's because our economy is heavily resource based and others are not. But since resources price are on the rise, our outlook is also better.

But like AWD said, too high is not good. We are a source of cheap skilled labor for U.S. (VS just cheap labor south of them). A lot of outsourcing has been done in Canada's favor.

High dollar will see those jobs go away plus any manufacturing goods export.

U.S. will keep devaluing their currency to close it's gap with China.

[hjr]

Originally posted by JustinL
Over the past 3 months, the Canadian dollar has been doing very well against many other currencies, not just the USD.

http://www.bankofcanada.ca/fx/iexe0102.gif
http://www.bankofcanada.ca/fx/eurocae01.cl.gif
http://www.bankofcanada.ca/fx/iexe1401.cl.gif
http://www.bankofcanada.ca/fx/iexe0701.cl.gif
http://www.bankofcanada.ca/fx/iexe1201.cl.gif

i did some more checking and in 2003 the numbers are very similar to what they are now for the euro, yen and pound. i would venture a guess that it is this period in early late fall that puts our dollar up? (the hong kong and us dollar didnt follow this pattern)

[Toma]

The US economy is hurtin' bad, and they are trying to make their goods more attractive to try and steer their economy out of the crash they are headed for.

Traditionally, Amercians have done this by FORCING open new markets for their junk that no one really needs. That is the reason behind most of their aggressive foreign intervention.

If you FORCE people (countries with traditionally closed economy) to have a free and open capitalist market....the Americans have one more place to open business, invest in, sell their junk etc.

They are running out of places to do this, so now they are letting their dollar tumble in an effort to sell more goods abroad.

Its is the fatal flaw of capitalism. By definition, if a capitalist economy is not expanding its market base, the economy is falling. Remeber, stock markets, prices and investment capital are based on projected sales and projected growth. Stagnant sales produce investor pull-out....

I think I heard today that the Ikea guy is now richer then Gates.... is this true??

[Toma]

By the way... US citizens will HATE this very soon, because the prices of anything IMPORTED will be MUCH higher for them.

I had honestly figured the US would be DONE as an economic superpower by 2025 if they continued along the path they are going....

Maybe it will happen sooner. Their debt is astronomical.

[FiveFreshFish]

Originally posted by Toma
I think I heard today that the Ikea guy is now richer then Gates.... is this true??

It's Ingvar Kamprad, the founder of Ikea. This was about 7 months ago.

http://edition.cnn.com/2004/BUSINESS/04/04/ikea.richlist/

http://in.news.yahoo.com/040404/137/2cdva.html

[Toma]

Originally posted by FiveFreshFish


It's Ingvar Kamprad, the founder of Ikea. This was about 7 months ago.

http://edition.cnn.com/2004/BUSINESS/04/04/ikea.richlist/

http://in.news.yahoo.com/040404/137/2cdva.html
LOL...who woulda thunk..... selling furniture of all things lol

[davidI]

Originally posted by Toma

LOL...who woulda thunk..... selling furniture of all things lol

I read that was actually wrong because they took the net cap of the company to be his value where as it's much less. He's still in the billions...but not higher than Gates. :dunno:

[Seanith]

I have an expensive purchase to make thats coming from the states, but its tough to decide when to buy.. is the issue at customs or whatever still going on?

[2002civic]

ya customs is still delayed last i heard, and will be for a while even if they end the strike due to the back log of stuff sitting there

[ehos]

Just to clear up a common misconception, the US Economy isn't failing, it's actually pulling very strongly out of post 2001 recession.

The Fed has increased the interest rates, and plan to do so again (Greenspan already announced this).

It's a sure sign of a recovering/recoverd economy. The US Dollar is sliding when compared to the Euro (which might be on purpose). It hurts the US in the short term, but there is long term gain in this.

It's not the US that's in trouble, it's China. Their Yuan is artifically pegged, their banks could collapse anytime. Their saving grace is still their profit margins (but there is a huge fundamental flaw that is appearing in China that no one has bothered to keep in check/fix).

I think it will be a MONSTER shock to alot of people.

[davidI]

Originally posted by ehos

It's not the US that's in trouble, it's China. Their Yuan is artifically pegged, their banks could collapse anytime. Their saving grace is still their profit margins (but there is a huge fundamental flaw that is appearing in China that no one has bothered to keep in check/fix).

I think it will be a MONSTER shock to alot of people.

I thought they just announced their first interest rate increase a while ago? I've seen a lot on MSNBC about China and it sounds like people in the markets think they're doing the right thing and trying to slow the economy?

[kenny]

Originally posted by 2002civic
ya customs is still delayed last i heard, and will be for a while even if they end the strike due to the back log of stuff sitting there

The customs delay is mostly gone now, I just had a package from USPS go through customs and it took 5 days. The wait time had reached 2 months at one point so it looks like its all under control again.

[E36M3]

Well you better tell the currency markets that, because the USD is continuing its sharp descent.

The perception is that the US government is incompetent and a lot of foreign reserves are moving away from USD to Euro which will hurt the United States a great deal in the long term:

http://news.yahoo.com/news?tmpl=story&u=/afp/20041124/bs_afp/forex_europe_041124183035


Originally posted by ehos
Just to clear up a common misconception, the US Economy isn't failing, it's actually pulling very strongly out of post 2001 recession.

The Fed has increased the interest rates, and plan to do so again (Greenspan already announced this).

It's a sure sign of a recovering/recoverd economy. The US Dollar is sliding when compared to the Euro (which might be on purpose). It hurts the US in the short term, but there is long term gain in this.

It's not the US that's in trouble, it's China. Their Yuan is artifically pegged, their banks could collapse anytime. Their saving grace is still their profit margins (but there is a huge fundamental flaw that is appearing in China that no one has bothered to keep in check/fix).

I think it will be a MONSTER shock to alot of people.

[Toma]

The US Economy IS falling....
China's is growing

based on foreign investment, energy use, and gross exports.