YOWkid

I still have GBPs that I bought at 2.53 and EUR bought at 1.66. *sigh*

Stranger

What is remarkable (and I suspect the pundits did not really did anticipate it) is the resilience that the Canadian economy has shown, even in the manufacturing sector. Looking back, of course, one detail that may not have been given its proper weight: the automobile sector is pretty much hedged against currency fluctuations. In other words, manufacturing in Canada is close to sales in Canada; and prices in CAD stay more or less constant even though the CAD has gone up.

The double surplus creates the conditions needed for a virtuous cicle. As the CAD goes up, prices of imported stuff drops (or if the importer chooses to keep the loot, at least stays flat). Thus inflationary pressure is low, below that of other countries, leading to a CAD expected to go up, and ultimately driving it up. While interest rates can be kept low, hence more investment and consumer spending.

In contrast, the US... I expect the CAD will continue moving up. Occasional jumps followed by periods of digestion.

Braindrain

I bought some EUR at $1.55, but that's not the worst of it. The upsurge has really been hurting my US investments. I'm starting to overweight into similar Canadian sectors now.

HomerJ

...its been a good thing...my trip to hawaii gets cheaper by the day...the products we sell we buy in japan using a higher $CAN and sell only in Canada...so overall its been a good thing.

exAC

I have had two people in my bank try to convince me that I should
1. Have a US dollar bank account (all expense are in Cdn$)
2. Buy US dollar mutual funds (rather than a medium risk Cdn fund)

They were both surprised when I told them that they were full of ****.

tcook052

To someone whose spent his entire adult life with a difference between USD & CAD, driving to work this a.m. and thinking about the currencies, I found it hard to even contemplate both being equal. I know, I know, we're not exactly there yet but the 90 cent mark is possible soon and then?

My TA side was happy as a stronger dollar might encourage more folks to travel abroad. ^

After Burner

It's been quite painful for me and I bet I'm not alone in this scenario. The basic problem is that employees in Canada expect to be paid in CAN$. They don't expect their salaries to be reduced as the C$ increases in value. However, corporate contracts and revenue are generally in US$. So that converts to fewer CAN$'s with which to pay employees.

Unfortunately, (for Canadian employees) an effective way of protecting against this is to hire employees in the US instead of in Canada. (I haven't resorted to that yet.) This is a drawback of doing business in a small country with a marginal currency.

tcook052

To which small country and marginal currency are you referring?

Stranger

Sure. On the other hand, perhaps you had it a little bit too good for a while? Things do come and go. Perhaps that the CAD was low was the reason you had been hiring people in Canada in the first place?

Anyway, as a consumer, (and we all are consumers before we are workers,) I do appreciate that most of what I buy has become so cheap because it's mostly coming from China.

Bottom line being that a ligher currency will serve as a srong driver toward improved productivity. Sometimes in painful ways. But the end result should be beneficial.

After Burner

Canada and the CDN$.

tcook052

Then I beg to differ as I think neither applies.

After Burner

You might think neither applies, but corporations entering into international business arrangements probably aren't influenced much by what you think. How many international contracts are you aware of in which the currency chosen is $CDN? That's largely unheard of. The US$ dominates (and sometimes the Euro).

tcook052

So because CAD isn't the universal currency the USD is it's therefore a marginal currency? How quaint if all too familiar a view of our small country from an American POV.

BTW, you'll note I never claimed our currency was as universally used as the U.S. buck, just disputing your claim that our small country had a marginal currency.

After Burner

I really don't understand your reaction to this. The Canadian population is about 0.55% of the world population. Perhaps you don't like the word "marginal", but 0.55% not exactly what I'd call dominant. My point is that pricing of goods and services in the international landscape is not done in CDN$. Therefore Canadian companies tend to be quite vulnerable to (and inconvenienced by) fluctuations in the C$.

I'm actually referring mostly to the UK/Europe.

tcook052

Why are you measuring population? Why not meaure total GDP in USD, where Canada ranks as the world's 8th largest? While small compared to the U.S., of course, our nation's economy is much bigger than others.