Loonie Falls

[gc1765]

"The Canadian plummeted farther than it ever has before in a single day Friday, as currency and equity investors around the world still appeared intent on bombing themselves back to the Stone Age.

...

The sheer drop followed a brief upward blast at 7 a.m. Friday, when unexpectedly powerful job creation numbers for September briefly pushed the currency up by nearly half a cent against its U.S. counterpart. But it quickly rejoined most other major currencies in their collective plunge against the greenback."

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Didn't see that one coming. What I don't understand is the fact that "most other major currencies" are also falling. IOW, why is the value of the American dollar increasing?

[Riverwind]

Didn't see that one coming. What I don't understand is the fact that "most other major currencies" are also falling. IOW, why is the value of the American dollar increasing?

In times of uncertainty people park their money in safe instruments such as the US$ or Yen treasury bills (the Yen has risen further than the US$). The fact that so many people seem to think that parking assets in US$ is "safe" suggests that the this crisis has not really undermined the US's position at the center of the global financial system.

[Topaz]

The falling $$$ is a good thing for exports and especially the manufacturing sector. The main thing Harper has to worry about is insurance that everyone usually has at their bank on their loans or mortgages doesn't get into trouble like the US.