Canadian dollar hits new 30-year high

jjaycee98

Electoral Member
Jan 27, 2006
421
4
18
British Columbia
The soaring Canadian dollar gained more altitude on Friday - hitting another 30-year high.

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And as a result Canadians are crossing the border in droves and giving their money to US businesses instead of supporting local business. The lineups were horrendous on the week-end.

Many years ago when the situation was the same...we had visited relatives in Seattle. Coming back at the Sumas/Huntingdon cars were backed up for miles on the US side. Being in the "service station" business our Son started counting Gas nozzles as the line moved very slowly to the check point. Arrived at a number of 368! Some places had more than 20 pumps. Most went broke and out of business when our dollar dropped and Canadians weren't heading accross to buy their gas and a few groceries.

Places along the Border are already experiencing this happening. On the US side they are over-joyed to see the Canadians back to spend their money with them. Just like sheep!
 

westmanguy

Council Member
Feb 3, 2007
1,651
18
38
Me living near the border does the same!

I always fill up my gas tank across the border and buy groceries there since the dollar has been so high.

I have also been planning a road trip to Vancouver with a friend - we usually go on the #1 highway but we have changed our plans and will be driving through North Dakota, Montana, Idaho, Washington and up to British Columbia.

Already booked the hotel rooms.

Also planning to visit Minot, North Dakota 2 times this summer to do lots of shopping.

Gee, I love being a Canadian consumer when our dollar is high!

lol, the Casinos take Canadian dollar at par now and I have heard rumours that when the dollar his 95 companies like Wal Mart and McDonalds along the border states are going to take the Canadian dollar at par to the US dollar.

This is an awesome time for Canadian consumers.
 

Avro

Time Out
Feb 12, 2007
7,815
65
48
54
Oshawa
......but a bad time for Canadian manufacturers and retailers because of unpatriotic jerks like you.
 

westmanguy

Council Member
Feb 3, 2007
1,651
18
38
I enjoy it! When the dollar hits the 90 level I pump 80% of my purchases into the North Dakota economy and other US states.
 

westmanguy

Council Member
Feb 3, 2007
1,651
18
38
We can't always have a hunky dory crappy Canadian dollar.

There are pros and cons to both a strong and weak dollar.

When its a strong dollar I reap its pros and by cheap products from our southern neighbour.

It runs both ways.

Northern US states look for Canadian tourism and Canadian provinces look for US tourism.
 

s243a

Council Member
Mar 9, 2007
1,352
15
38
Calgary
This Tuesday, Canada is set to raise the interest rate to slow down the Canadian dollar rise.

How does that work? Doesn't raising the interest rate usually strengthen the dollar? The only way it is going to slow down the dollar is if it hurts Canadian growth. That is not the best medicine in my opinion.
 

Avro

Time Out
Feb 12, 2007
7,815
65
48
54
Oshawa
How does that work? Doesn't raising the interest rate usually strengthen the dollar? The only way it is going to slow down the dollar is if it hurts Canadian growth. That is not the best medicine in my opinion.

It works by weakening the economy and lowering investment.
 

Avro

Time Out
Feb 12, 2007
7,815
65
48
54
Oshawa
We can't always have a hunky dory crappy Canadian dollar.

There are pros and cons to both a strong and weak dollar.

When its a strong dollar I reap its pros and by cheap products from our southern neighbour.

It runs both ways.

Northern US states look for Canadian tourism and Canadian provinces look for US tourism.

The pros in your case are watching with glee Canadian buisnesses going bankrupt because of unpatriotic cheapskates like you.
 

s243a

Council Member
Mar 9, 2007
1,352
15
38
Calgary
It works by weakening the economy and lowering investment.

That sounds like some tough medicine. We must remember though that a higher interest rate means that the Canadian bond market becomes more attractive. Thus there is still a question of weather it would work. Besides foriegn investors don't need to borrow at the Canadian interest rate anyway.
 

Toro

Senate Member
Generally, a strong currency is a sign of a strong economy and a weak currency is a sign of a weak economy.

However, the value of the currency should rise along with the intrinsic fundamentals of an economy. If the currency gets too far ahead of itself, it can cause damage to the real economy.

But Canadians should want a higher currency because it improves their relative standing in the world. It makes them relatively wealthier.
 

TomG

Electoral Member
Oct 27, 2006
135
10
18
I’m not exactly current on this stuff, but I thought that most central banks now change their lending rates as a technical exercise based on inflation forecasts, and policy changes (such as central bank lending rate changes) are intended to target inflation rates directly. I think that it’s mostly news media commentators that attribute central bank interest rate changes to attempts to affect the exchange rate, strengthen the economy or whatever.

Central bank lending rate changes tend to be technical exercises designed to achieve a particular goal in a measure such as inflation through administered changes in the bank rate. The big economic stuff like growth, wealth and economic strength are subsumed in the relationship between a simple measure like inflation rate and the web of relationships in abstract theory.

In the world of macro-economics everything is related to everything, so it may be fair to say that raising interest rates will raise the dollar, and it also may be fair to say that it will weaken it. Economists have two mouths with at least four sides. It’s the theory that makes for double-speak. What is fair to say depends on context, which in macro-economics is almost impossible to specify adequately.

An adequate specification would have to include time frame, because nearly any forecast of anything is true in absence of a time frame. However, in the short term, raising rates is more likely to raise the dollar since it attracts investment and invites speculation, and investment money can move very quickly. Lowering the dollar by wrecking the economy generally takes a while, and who know what might happen while we’re waiting on the wreckers.

Making statements like ‘interest rates will be raised to strengthen the economy’ is sort of like reasoning from a hypothetical and always having to affirm the antecedent, and never being able to include all relevant postulates. A hypothetical where the antecedent is affirmed can be a true statement even when the antecedent is false (if interest rates are raised, then….). But in a macro-economic system, interest rates can’t just be raised, because everything is related to everything and dependent on each other. Interest rates are market determined. It is not true that interest rates are raised. Central banks raise their lending rates, not interest rates in general.

Even if the ability of a central bank to engineer interest rates through its market influence is granted, there still is the problem of missing postulates such as the time frame between central bank lending rate changes and effect (some economists say 2 1/2 years average and others say there’s really no reliable relationship). There’s also a bunch of missing postulates such as the inflation rates among trading partners and structural relationships within a domestic economy. However, there is one missing postulate that really is impossible to specify. What might happen in the several years or so while we’re waiting for the administered bank rate changes to work that might be relevant to the change? The future can’t be forecast reliably and engineers can’t engineer for factors that cannot be known. Wars, hurricanes, oil embargos, speculative attacks epidemics etc. happen, and happen quickly and without much warning. A successful forecaster never says what will happen and when it will happen in the same sentence.