The Canadian Dollar now stands at about $1.05 U.S., making it as strong as it has been in the past few years, so what does that really mean? Investors are scared of the U.S. national Debt, for one, and Canada’s commodity laden economy looks attractive to investors as well.
So how shall we celebrate this strong Loonie?
Some Easter cross border shopping might be called for. I don’t think the stores close at all in the U.S. over Easter, whereas the stores in Ontario are closed both Friday and Sunday, so I would guess the border crossing at Niagara is going to be mighty busy this weekend. Other border crossings may be busy spots as well, and I would guess that those border U.S. towns and cities will be glad to see their neighbours from the North spending in their stores.
Will the Dollar stay this strong? That’s a very good question. My suspicion is our American cousins are now figuring out what Canada did in the 90’s, that a weaker dollar makes your exports that much more attractive to perspective buyers (around the world). I have seen conflicting arguments about how Canadian industry will deal with the strong dollar, the obvious reaction is concern about being unable to sell our exports because of the strong dollar. The converse argument is that Canadian companies can make capital expenditures and get more infrastructure (i.e. machinery and such) and thus will be able to make their companies more efficient.
Either argument about Canada is plausible, I guess the telling statistic to watch is whether the Employment numbers continue to improve or not. If there are more folks employed, who really cares about the strength of the dollar? Yes it’s a simplistic statement, but the way a lot of folks look at this as well (especially if they are employed).
Given this is Easter weekend, there won’t be a traditional Friday post, and there will be not as much action on Twitter either. Enjoy this holiday weekend with your Family, I plan on doing the same.