So the Canadian dollar jumped ahead of the greenback today.

[Shock]

And I still pay at least 28 bucks for a case of beer, Ontario blows. Can't wait for 13% HST on July 1st......

 

[gmichael]

By 9/10,000 of a dollar, but yeah. It's the wrong direction from my point of view. But doesn't this mean that we can buy Canadian speakers for less now?

 

[Shock]

You get everything for less, that's the point, even Canadian made goods.

 

[Alex2507]

Canadians get porked pretty hard but the weather's nice ...

 

[Davemcc]

Can't wait for 13% HST on July 1st......

That's going to be a kick in the nuts. I feel like dropping out of the economy completely until McGuinty is replaced.

 

[MinusTheBear]

You sure as hell won't see the higher Canadian dollar be reflected in price changes of beer or cigarettes for that matter. The pricing of these products is all tied up in taxation! We are also starting to see the rise in the black market for cigarettes once again. I don't think you will see the government try to lower prices but increase RCMP enforcment.

A higher Canadian dollar may or may not be a good thing. Right now consumer savings can be found by shopping in the United States. We might see a drop in the price of imported goods but domestic goods will probably remain unchanged. This is certainly a positive for consumers and their purchasing power. On the other hand the higher Canadian dollar could also have a negative impact on economic growth.

 

[mtrycrafts]

... but the weather's nice ...

When? I might come visit.

 

[Nugu]

Depends on the beer I suppose. I've been known to spend 7$ on a bottle.

 

[Chu Gai]

Canadians get porked pretty hard but the weather's nice ...

I wish you wouldn't talk that way about Celine Dion

 

[GO-NAD!]

By 9/10,000 of a dollar, but yeah. It's the wrong direction from my point of view. But doesn't this mean that we can buy Canadian speakers for less now?

There is no wrong or right direction. It is what it is. A lower greenback can be a big positive for the US economy - boosting exports and encouraging people to buy domestic products. On the other hand, it can lead to higher inflation. As a net importer, it could be hard for the US, in the short term.

The latest jump for the "loonie" was a warning from the central bank that interest rates will be going up, because they're afraid of inflation. That big real estate fiasco that happened in the US? It could happen up here too, as real estate prices are increasing at insane rates in some areas, like Toronto and Vancouver. But not where I live. People are acting retarded in those markets. Yes, I said retarded. Politically incorrect, but I can't think of a more appropriate word to describe people who are buying dumps at stratospheric prices.

Right now, a lower dollar would be helpful for the US. Why do you think the Chinese peg the Yuan to the greenback? They don't want their currency to appreciate against the dollar, that's why. If it did, their exports to the US would suffer.

The frustrating thing for Canadians when the loonie appreciates against the US dollar, is that prices don't seem to change much for products from the US.

 

[billy p]

And I still pay at least 28 bucks for a case of beer, Ontario blows. Can't wait for 13% HST on July 1st......

twenty eight...what the hell are you drinking...it must be some domestic crap...

 

[MinusTheBear]

twenty eight...what the hell are you drinking...it must be some domestic crap...

James Ready, Lakeport, Carling, Laker, Lucky Lager, Muskoka. There are quite a few others as well in that $28 price range.

 

[billy p]

Maybe I should reconsider what I stock my fridge with...?. Since I only drink beer sparingly...I don't mind paying nearly twice the cost for imported.

 

[aberkowitz]

There is no wrong or right direction. It is what it is. A lower greenback can be a big positive for the US economy - boosting exports and encouraging people to buy domestic products. On the other hand, it can lead to higher inflation. As a net importer, it could be hard for the US, in the short term.

The latest jump for the "loonie" was a warning from the central bank that interest rates will be going up, because they're afraid of inflation. That big real estate fiasco that happened in the US? It could happen up here too, as real estate prices are increasing at insane rates in some areas, like Toronto and Vancouver. But not where I live. People are acting retarded in those markets. Yes, I said retarded. Politically incorrect, but I can't think of a more appropriate word to describe people who are buying dumps at stratospheric prices.

Right now, a lower dollar would be helpful for the US. Why do you think the Chinese peg the Yuan to the greenback? They don't want their currency to appreciate against the dollar, that's why. If it did, their exports to the US would suffer.

The frustrating thing for Canadians when the loonie appreciates against the US dollar, is that prices don't seem to change much for products from the US.

Thank you for this post. It greatly annoys me when people discuss currencies as if there are winners and losers (not directed to anybody on this board, I'm really referring to every member of Congress since 1980). Currencies need to be allowed to strengthen and weaken to reflect differences in interest rates and monetary policy between countries. To understand some of this theory, read up on the macroeconomic theory of Covered and Uncovered Interest Parity (http://en.wikipedia.org/wiki/Interest_rate_parity).

These theories very simply say that in efficient markets you should not be able to borrow money in one currency (e.g. US dollars paying a US interest rate), convert it to another currency and lend it out (e.g. UK pounds at the UK interest rate) and make a spread on this transaction. You easily understand this concept by simplifying it to 2 variables- exchange rates and interest rates. Since interest rates are generally set by a central bank, the exchange rate floats around to remove the possibility of arbitrage.

In reality, there is a third variable that gets involved- a country's monetary policy. This is most evident in China. China pegs their currency to the dollar, and they have fixed interest rates. The only way they are able to do this is to through central bank monetary policy. China has massive reserves of foreign bonds (in excess of $2 trillion, although nobody knows exactly how much b/c it's a state secret!), with the vast majority being USD denominated, in order to keep their currency from floating. The result of this is that most business in China is conducted in dollars as opposed to Yuan.

If China were ever to stop amassing reserves (or stop replacing them as they matured), they would not be able to prop up their currency at a fixed rate to the dollar.

 

[Whitey80]

The frustrating thing for Canadians when the loonie appreciates against the US dollar, is that prices don't seem to change much for products from the US.

It's because us Americans are generally angry and spiteful, especially against our little brother up there that won't quit following us around

 

[gmichael]

There is no wrong or right direction. It is what it is. A lower greenback can be a big positive for the US economy - boosting exports and encouraging people to buy domestic products. On the other hand, it can lead to higher inflation. As a net importer, it could be hard for the US, in the short term.

The latest jump for the "loonie" was a warning from the central bank that interest rates will be going up, because they're afraid of inflation. That big real estate fiasco that happened in the US? It could happen up here too, as real estate prices are increasing at insane rates in some areas, like Toronto and Vancouver. But not where I live. People are acting retarded in those markets. Yes, I said retarded. Politically incorrect, but I can't think of a more appropriate word to describe people who are buying dumps at stratospheric prices.

Right now, a lower dollar would be helpful for the US. Why do you think the Chinese peg the Yuan to the greenback? They don't want their currency to appreciate against the dollar, that's why. If it did, their exports to the US would suffer.

The frustrating thing for Canadians when the loonie appreciates against the US dollar, is that prices don't seem to change much for products from the US.

Are you sure that they are acting?

 

[gmichael]

Thank you for this post. It greatly annoys me when people discuss currencies as if there are winners and losers (not directed to anybody on this board, I'm really referring to every member of Congress since 1980). Currencies need to be allowed to strengthen and weaken to reflect differences in interest rates and monetary policy between countries. To understand some of this theory, read up on the macroeconomic theory of Covered and Uncovered Interest Parity (http://en.wikipedia.org/wiki/Interest_rate_parity).

These theories very simply say that in efficient markets you should not be able to borrow money in one currency (e.g. US dollars paying a US interest rate), convert it to another currency and lend it out (e.g. UK pounds at the UK interest rate) and make a spread on this transaction. You easily understand this concept by simplifying it to 2 variables- exchange rates and interest rates. Since interest rates are generally set by a central bank, the exchange rate floats around to remove the possibility of arbitrage.

In reality, there is a third variable that gets involved- a country's monetary policy. This is most evident in China. China pegs their currency to the dollar, and they have fixed interest rates. The only way they are able to do this is to through central bank monetary policy. China has massive reserves of foreign bonds (in excess of $2 trillion, although nobody knows exactly how much b/c it's a state secret!), with the vast majority being USD denominated, in order to keep their currency from floating. The result of this is that most business in China is conducted in dollars as opposed to Yuan.

If China were ever to stop amassing reserves (or stop replacing them as they matured), they would not be able to prop up their currency at a fixed rate to the dollar.

Well, I do order products from all over the world in my job. When the US$ dips, we effectively pay more for goods. I admit that this isn't the whole picture, but it is the piece that I have to deal with daily. To me, it's the wrong way.

 

[GO-NAD!]

Well, I do order products from all over the world in my job. When the US$ dips, we effectively pay more for goods. I admit that this isn't the whole picture, but it is the piece that I have to deal with daily. To me, it's the wrong way.

Yes, currency fluctuations affect different people in different ways. As an importer, it isn't good for you when the US dollar falls.

For many years the Canadian dollar was in the toilet. The result was that our exports were relatively inexpensive. However, that low dollar became a crutch and producers didn't bother to improve productivity. Now, it's a different story and the last couple of years have seen some honest effort in improving productivity.

 

[GO-NAD!]

Thank you for this post. It greatly annoys me when people discuss currencies as if there are winners and losers (not directed to anybody on this board, I'm really referring to every member of Congress since 1980). Currencies need to be allowed to strengthen and weaken to reflect differences in interest rates and monetary policy between countries. To understand some of this theory, read up on the macroeconomic theory of Covered and Uncovered Interest Parity (http://en.wikipedia.org/wiki/Interest_rate_parity).

These theories very simply say that in efficient markets you should not be able to borrow money in one currency (e.g. US dollars paying a US interest rate), convert it to another currency and lend it out (e.g. UK pounds at the UK interest rate) and make a spread on this transaction. You easily understand this concept by simplifying it to 2 variables- exchange rates and interest rates. Since interest rates are generally set by a central bank, the exchange rate floats around to remove the possibility of arbitrage.

In reality, there is a third variable that gets involved- a country's monetary policy. This is most evident in China. China pegs their currency to the dollar, and they have fixed interest rates. The only way they are able to do this is to through central bank monetary policy. China has massive reserves of foreign bonds (in excess of $2 trillion, although nobody knows exactly how much b/c it's a state secret!), with the vast majority being USD denominated, in order to keep their currency from floating. The result of this is that most business in China is conducted in dollars as opposed to Yuan.

If China were ever to stop amassing reserves (or stop replacing them as they matured), they would not be able to prop up their currency at a fixed rate to the dollar.

Well, you certainly expanded on that in a much more articulate fashion than I could!