Heather Scoffield's article on the Canadian dollar in today's Globe and Mail, reports on the climb of the Canadian dollar. Today, the dollar was trading at $1.0459 (U.S.) which is a record high after the Bretton Woods agreement. However, it seems that the main reason for the record high is due to a weak U.S. dollar. “It's clear that a lot of this is U.S.-dollar related, and I can't see anything in the near term that's going to cease the pressure on the U.S. dollar,” Mark Chandler a fixed income strategist for Royal Bank said. Many feel that the dollar has risen too far too fast; but there appears to be minimal changes happening to halt the rise.
The rise in the Canadian dollar has had positive and negative effects to Canadians. A positive includes the increased positive self image it has had on the Canadian image of being inferior to the United States. As Canadians we constantly compare our country to the United States and in most cases (especially dealing with the economy) feel inferior. Having a stronger dollar can begin to dispel this incorrect image of our country. A negative effect it can have is the trend towards heading to the States to do our shopping. Many people do not understand the logic of "shopping locally"; and with an increase of our dollar it only increases this desire to take our money elsewhere. If we support our local economy, the money will stay in our community which will benefit us and our families.
2 comments:
Re: “...a weak U.S. dollar.”
A “Federal Reserve Note” is not a U.S.A. dollar. In 1973, Public Law 93-110 defined the U.S.A. dollar as having the value of 1/42.2222 fine troy ounces of gold.
I think your point, that the high Canadian dollar stimulates people to shop more frequently in the U.S, which may detriment our local economy, is a good one. However, I think the majority of shoppers who head south are doing so because of cheaply priced U.S goods in comparison to Canadian goods. Once the Canadian prices come down, I believe Canadian consumers will be content to do their weekend shopping at home, and will save American shopping for their next Disneyland trip.
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