Canadian Dollar Dropping!
- Thread starter scott231
- Start date
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Smother
Many of Canada's commodities index have pullled back in prices due to the reason that the market feels that demand will soften therefore the dollar drops.
IE....latest report shows that OIL inventories were alot higher than analysts expected due to a mild winter and poor consumption. The price of oil has dropped more than $20 from the high. OIL has been hot for Canada.
I personally think that it will bounce around the MID 80 cent range for some time. I don't see .90 cents for awhile.
http://www.tfc-charts.w2d.com/chart/BC/27
IE....latest report shows that OIL inventories were alot higher than analysts expected due to a mild winter and poor consumption. The price of oil has dropped more than $20 from the high. OIL has been hot for Canada.
I personally think that it will bounce around the MID 80 cent range for some time. I don't see .90 cents for awhile.
http://www.tfc-charts.w2d.com/chart/BC/27
A few other macroeconomic factors are contributing to the short term decline of the loonie:
-The US trade balance narrowed for the third consecutive month to $58.2 bn – the lowest deficit since July 2005
-There was also a lag in Canadian GDP growth during the 4th Q at about 1.2% compared to a stronger than expected 2.2% on the US side, which means:
- The Bank of Canada is expected to cut interest rates in upcoming months, while the US Federal Reserve will hold rates steady for the next few months
-The US trade balance narrowed for the third consecutive month to $58.2 bn – the lowest deficit since July 2005
-There was also a lag in Canadian GDP growth during the 4th Q at about 1.2% compared to a stronger than expected 2.2% on the US side, which means:
- The Bank of Canada is expected to cut interest rates in upcoming months, while the US Federal Reserve will hold rates steady for the next few months
jimbo2006 said:
Recenlty I had this discussion with my currency broker, and he mentioned, his group thinks the loonie will drop some more, up to another .05 by the end of the year, as there are many other countries with much higher interest rates.
I don't see a high canadian dollar helping anyone except people going
on vacation. It 's killing our manufacturers that export the bulk of their
products and making us a higher cost producer which will drive more
jobs to Mexico. Who has seen any kind of real drop in prices for any
thing coming from the US ? I sure can't think of anything.
Big K
on vacation. It 's killing our manufacturers that export the bulk of their
products and making us a higher cost producer which will drive more
jobs to Mexico. Who has seen any kind of real drop in prices for any
thing coming from the US ? I sure can't think of anything.
Big K
i can't even find anything from the US or Canada for that matter ...big k said:
its ALL made in china!
Well, the price of any raw materials our manufacturers use that are valued in US$ (like oil) will be cheaper, so that helps them somewhat on the back end. If you buy stuff directly from the US, it's definitely cheaper than it used to be. If you're buying stuff in Canada that is imported from the US, then I agree sometimes the middlemen just pocket the new savings.big k said:
Yes, a low C$ is good for manufacturers, but really it's just hiding some of their inefficiencies relative to their US counterparts.
Philosophically, I like a higher C$. I'm happy with an $0.85 to $0.90 dollar, but I sure don't want to see it back at $0.63. I think the head of Talisman Energy said, "no currency ever depreciated its way to greatness," which is true in a way. There's a lot more weak currencies in this world than strong ones. Talk to someone from India or Mexico and see how much they like having a weak currency. And I like that Canadian travellers can go to the US and not have to stay in fleabag hotels because that's all they can afford, or that US travellers come up here and stay in our nicest hotels because it's so cheap. My friend lives out east and he said all the nice property in Nova Scotia was owned by Americans because it was just as good as the property in Maine but about half the price once you factor in the exchange rate. The Canadian in me would like to see Canadians owning our best land.
If you are a hockey fan, a high Canadian dollar helps all teams. A member of the Oilers once said that each $0.01 move in the C$ changes their budget by about a million bucks.
Also, a high C$ helps prevent a "pussy drain" because our SPs will not be as enticed to go to the US and work.
