Originally Posted by exAC
A talking head on ROB-TV last week suggested that the C dollar and the US dollar could be at parity in 12 months.
20 minutes later the teller at the bank suggested again that I should have a US currency account to deposit my cheques into. I told her again that I have no US expenses and the Canadian dollar is rising, so bad advice.
First, shouldn't we change the title to "0.80 loonie?"
It does seem there is a consensus out there that the USD should drop further across the board.
Right now, though, we in effect have a dollar block that includes China and Japan. Which roughly balances its "external" trade. Now on the other hand, if China finally lets the RMB float or go up against the dollar, then I would expect the USD to drop and the RMB to go up maintaining a trade-averaged value roughly equal to what it is today.
Incidentally, some analysis also predict that the CAD will drop back to around 0.75. although my bet would be that the loonie will continue going up. At this point in time, Canada is the only OECD (or group of 7/8?) country that's running a busget surplus. The loonie has been way too low for much too long. Still is.
Current recovery is driven by low interest and the "old" economy. Resource-hungry. Favors Canada big time.
As to the manufacturing sector, it's not doing anywhere near as bad as most of us expected. I suspect the main reason is that the automobile sector is more or less currency-neutral: costs in Canada go up together with income from sales in canada, and roughly in the same amount.