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Thread: Loonie closes above parity for the first time in nearly 31 years

  1. #1
    Elite Member aabbcc's Avatar
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    Oct 2005
    Watching the sun set over Lake Superior.

    Thumbs up Loonie closes above parity for the first time in nearly 31 years

    TORONTO - The loonie rose sharply and held onto its gains on Friday, ending the trading day above the U.S. dollar for the first time in nearly 31 years.

    The Canadian dollar finished up two-thirds of a cent at 100.52 cents US continuing its spectacular tear and marking the highest close since Nov. 25, 1976.

    The jump has been partly motivated by the U.S. greenback, which has weakened in the face of a credit crisis sparked by the U.S. subprime mortgage market.

    Helping the dollar's rise was a Statistics Canada report that the economy grew by 0.2 per cent in July, the same rate as in June. That was below the 0.4 per cent reading that economists had expected.

    The dollar touched parity for the first time since 1976 in intraday trading on Sept. 20 and has risen about 100 cents US on several days since.

    On Friday, the U.S. dollar continued its slump against most major currencies as inflation appeared to be easing. In morning trading, it slid to a new low against the euro for the seventh straight session.

    Earlier this week, the Bank of Canada's governor commented on the U.S. dollar's rapid fall and its potential impact on the Canadian economy.

    "In recent days, the Canadian dollar has moved sharply above the trading range assumed (by the bank in July) and we are now having to examine the causes of this strengthening, should it persist," governor David Dodge said in a speech Tuesday at the Vancouver Board of Trade.

    "There is uncertainty about the extent and duration of the tightening of credit conditions in Canada and, hence, about the tempering effect this will have on the growth of domestic demand."

    He added that the bank is "gauging the effects" and that it "will be one of the bank's most pressing tasks over the coming months."

    George Davis, senior technical analyst at RBC Capital Markets, said RBC predicts the loonie could touch as high as $1.03 US in the fourth quarter, which begins Monday on Oct. 1.

    He added that interest rates, which helped the loonie's rise, are expected to stay unchanged while the U.S. Federal Reserve will likely make another cut.

    Canada's rising currency has made life more difficult for manufacturers and anyone else competing for sales in the United States.

    A strong dollar is potentially a boon to shoppers, if U.S. imports are priced lower as a result or if they travel to the United States or if they buy online from a U.S. seller.

    However, the auto industry has been hit with a $2-billion class-action lawsuit filed in Ontario. The suit accuses several automakers of artificially maintaining car prices in Canada and inhibiting cross-border vehicle shopping.

    Loonie closes above parity for the first time in nearly 31 years - Yahoo! Canada News

  2. #2
    Hit By Ban Bus! pacific breeze's Avatar
    Join Date
    Oct 2005
    in the wild blue yonder


    I bought something fairly expensive online last week because I figured it would be my only chance to get it for the same price as at home! Bah. I should have waited!

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