Personal Finance

Canadian Dollar - Is it getting stronger? Effect on Economy?

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  • Jun 1st, 2009 5:26 pm
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Jul 4, 2008
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Vancouver, BC

Canadian Dollar - Is it getting stronger? Effect on Economy?

ok, so i've been wondering this...
is the Canadian Dollar getting stronger? or is the American Dollar just getting weaker?

and i've read that if the Canadian dollar hits par, it's not good for Canadian Economy. But, why is that?
20 replies
Deal Fanatic
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Oct 23, 2003
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exports to US are huge and if the price rises, the quantity falls. Jobs. If its not cheaper to come to Canada to make movies for example, why come at all? They have tax brakes in the US as well.

So on and so forth.
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Sep 28, 2007
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My theory is that Canada hasn't done any QE. Whereas the US and Britain have. That and there's been no bank bailouts in Canada
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Feb 6, 2009
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In a way we have.. we've been funnelling money into the car companies.
And bought some mortgages.

I wonder how we would have done if the finance minister had been someone other than Flaherty.
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Sep 28, 2007
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I guess free market rules only applies to some and bailouts to others.
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Jan 2, 2009
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Value Hunter wrote: That and there's been no bank bailouts in Canada
Apart from the $125 billion subprime mortgage purchase by the taxpayers, that is. :lol:
Deal Fanatic
Mar 6, 2005
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Value Hunter wrote: Calm down people. I said bank bailouts. Nothing even close to what the US is doing. Have some perspective and compare what Canada is doing to what the US is doing.

http://www.cbsnews.com/stories/2009/04/ ... 4231.shtml
No kidding, the US has been throwing out money like crazy (our $50 Billion is peanuts compared to them). It's no surprise that their dollar will eventually fall. They're essentially just printing money, however it's unique though that they are the only ones that can basically print money and not have the currency immediately crash. But that's probably partly to do with how a lot of stuff is denominated in USD.

Canada is also said to have one of the soundest banking systems in the world and actually is a model.
CANBERRA (Reuters) - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.
http://www.reuters.com/article/newsOne/ ... X220081009
Obama eyes Canada as bank model

Mulls 'Canadian option' as a way to tweak rather than radically overhaul the troubled U.S. system
David Olive
BUSINESS COLUMNIST

Barack Obama, contemplating sweeping reforms to the U.S. financial system, cited Canada as a model worth emulating in an interview published yesterday
http://www.thestar.com/Business/article/628422
Newbie
May 28, 2009
35 posts
The common argument against a high dollar is that it hurts export based manufacturing.

My reservation though is I suspect the underlying factor in the decline of the US dollar is ultimately that their economy can no longer support massive trade deficits with countries like Canada and China that have used undervalued currencies as a competitive advantage.

In short we may not like it but we better get used to it, the free ride is over.
Deal Addict
Feb 9, 2008
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Galois wrote: My reservation though is I suspect the underlying factor in the decline of the US dollar is ultimately that their economy can no longer support massive trade deficits with countries like Canada and China that have used undervalued currencies as a competitive advantage.
The rate that Obama is printing money, the US dollar will soon be worth less than a sheet of toilet paper; the exchange rate with the Yuan will probably be more important in a year or two than the exchange rate with the Washington Peso.
[OP]
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Jul 4, 2008
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ok, so to be clear, the US$ is just falling then?
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Mar 6, 2005
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chris103610 wrote: ok, so to be clear, the US$ is just falling then?
Not that simple, it's actually a bit of both (CAD Rise and USD Fall) :o
Member
Oct 19, 2007
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Bugler wrote: I wonder how we would have done if the finance minister had been someone other than Flaherty.
Is that meant in praise or derision? Ralph Goodale wouldn't have done much different?
Sr. Member
Dec 1, 2005
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Calgary
angel_wing0 wrote: Well gas prices have been rising like crazy because of the strong CDN.
Actually, it's reversed... the Canadian dollar has been rising (in part) due to rising oil prices...
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Mar 6, 2005
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j27lee wrote: Actually, it's reversed... the Canadian dollar has been rising (in part) due to rising oil prices...
And also reversed that while Oil Prices go up, a higher Canadian dollar will technically bring gas prices down or at least stablize them a bit.

However as we know Gas Stations will only decrese prices marginally if the stronger dollar helps lower gas prices. They always find some excuse to raise the price anyway. "Oh a natural gas pipeline in russia is leaking" - yeah like we put in natural gas into our cars.....

In GVR it's pretty common to have up to a 7 cent difference between Morning and Evening gas prices.
Deal Expert
Feb 29, 2008
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Montreal
tkyoshi wrote:
In GVR it's pretty common to have up to a 7 cent difference between Morning and Evening gas prices.
Rest assured, that's a country wide phenomenon.
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Jul 4, 2008
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mr_raider wrote: Rest assured, that's a country wide phenomenon.
yeah, it probably is, but i remember our local news stations did a comparison and vancouver topped the list with some of the highest gas prices in the country.

and our gas prices should be cheaper shouldn't they? if our $$ is strong we can buy gas for much less, so the gas should be cheaper? this is ********.. $1.07 for mid grade gas is stupid.
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Mar 6, 2005
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chris103610 wrote: yeah, it probably is, but i remember our local news stations did a comparison and vancouver topped the list with some of the highest gas prices in the country.

and our gas prices should be cheaper shouldn't they? if our $$ is strong we can buy gas for much less, so the gas should be cheaper? this is ********.. $1.07 for mid grade gas is stupid.
Yeah Vancouver is consistantly the worst. I love the news though you hear on CBC (national news) and stuff "Gas prices finally above $1 again". Then you're like rubbish! It's been over a $1.00/L in Vancouver for the last few months how is this news! :o Even just over the border it's not unusual to be about 30-40cents/L cheaper (that's after exchange too!), and that considered "expensive" to the Americans since they charge more at the border. It drops even further as you go down into Bellingham/Seattle.

I think right now it's 1.074 for regular today.

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