Canadian Dollar at Parity with the US Dollar

old_bold&cold · November 5, 2007

Does anybody think that Bush will do much of anything to shore up the USD, with the time he has left to do so? I still see Bush as being way too engrossed in the war in Iraq and Afghanistan, to really care much about the USD. I am sure he would rather it not be so, but he will probably put a positive spin on this much the same way we did here in Canada when our dollar was in the tank.

I just do not see the president taking much time and effort to lessen the fall of the USD at all. I maybe wrong, but I have yet to hear from him any comment about the issue. The federal reserve has not really acted much on anything and the small interest raises, here and there do not indicate that they find the lower dollar such a large thing to worry about. The drop in the USD is probably the best way to make sure that the american people spend their money at home, rather then abroad, and the obvious rise in prices of imported goods will make for more reasons for manufacturing within the USA. I am not sure if there really is a number where this type of thing is made clear to people, but I think it will have to drop a lot more then a few cents, for this to be a driving force. If the drop is large and thought to be long term, then yes I think that the USA will again become protectionist and manufacturing will again return to the domestic market. That may well spell bad news for Canada in some respects, but since Canada is now more of an oilsupplying economy, it will not hurt us as much as it would have 20 years ago.

M.Dancer · November 5, 2007

This is false....the Americans have purposely used fiscal and monetary policy to do exactly that. Not to 100% effect, but definitely an influence. One can't claim that deficit spending impacts dollar valuations on one hand, and then claim that government "can do bugger".

I said there were ways to temper the flux...by increasing or decreasing the interest rates....but show where a gove't has purposely jumped into a deficit in order to impact their currency.....

jdobbin · November 6, 2007

The dollar has pushed past a $1.08 this morning.

http://ca.news.yahoo.com/s/reuters/canada_...ollar_bonds_col

- A surge in commodities prices and negative sentiment towards the U.S. dollar pushed the Canadian dollar well past the US$1.08 mark, to set a fresh modern-day high against its U.S. counterpart.

There is going to be growing pressure from companies that export to address the matter as this continues. Even the reduction in the corporate tax cannot affect these companies if their goods become to expensive for the world to purchase.

M.Dancer · November 6, 2007

The dollar has pushed past a $1.08 this morning.
http://ca.news.yahoo.com/s/reuters/canada_...ollar_bonds_col

There is going to be growing pressure from companies that export to address the matter as this continues. Even the reduction in the corporate tax cannot affect these companies if their goods become to expensive for the world to purchase.

At this point the loon is in full speculative mode.....I said the the Mrs this morn, if it hits 1.10 (and it certainly might) buy our holiday US Pesos now....I can't see the loon being this high in june as there ain't a good reason beyond greed for it being as high as it is now.

Smallc · November 6, 2007

At this point the loon is in full speculative mode.....I said the the Mrs this morn, if it hits 1.10 (and it certainly might) buy our holiday US Pesos now....I can't see the loon being this high in june as there ain't a good reason beyond greed for it being as high as it is now.

Yeah, no reason if you totally ignore the price of commodities and the weakness in the US dollar.

jdobbin · November 6, 2007

At this point the loon is in full speculative mode.....I said the the Mrs this morn, if it hits 1.10 (and it certainly might) buy our holiday US Pesos now....I can't see the loon being this high in june as there ain't a good reason beyond greed for it being as high as it is now.

As long as oil continues to go up as well, I don't know what can stop the dollar. As winter hits and demand grows, we could very well see $1.10.

As you said, we'll see if greed is the sole driver now or whether the demand for oil will sustain that level. Given China and the rest of Asia's thirst for fuel, we might see demand stay right where it is.

old_bold&cold · November 6, 2007

The CDN will be going higher and from my family ties into the banking world I can tell you that most bank CEO's have said six months ago that it will hit $1.10 by next June, but they are now saying everything is happening much faster and they figure it will now be at a minimum of $1.10 just before Christmas. They are also saying that coming into the new year the USD will fall against most of the world currencies by another 10% by mid 2008. If they are right we will see a $1.20 CDN by next summer. They also are not and I repeat not seeing any fast turn around for the USD for the remainder of 2008- 2009.

So if our banks are setting their money policies on this data, I would say that we would be wise to follow suit. It does not look like the USD will have much good news on it for quite some time to come. I know I am waiting till January to buy several large purchases, from the USA, as I want the GST cut as well asthe higher CDN. I could hold out till June, but most of what I wnat is for a kit car I am building in my retirement, and I do most of my work over the winter, but if the difference is high enough I can schedule for later. Hell, if I am lucky I may even see Canadian retailers selling at US prices by then, but I will not hold my breath on that.

bush_cheney2004 · November 6, 2007

Does anybody think that Bush will do much of anything to shore up the USD, with the time he has left to do so? I still see Bush as being way too engrossed in the war in Iraq and Afghanistan, to really care much about the USD. I am sure he would rather it not be so, but he will probably put a positive spin on this much the same way we did here in Canada when our dollar was in the tank.

He is doing "something"....maintaining a weak dollar policy by design. In comparison, the loonie is very strong and you guys are beginning to squirm!

old_bold&cold · November 6, 2007

He is doing "something"....maintaining a weak dollar policy by design. In comparison, the loonie is very strong and you guys are beginning to squirm!

I am definitely not squirming and neither are our bankers or anyone else for that matter. Yes the low USD will affect our manufacturer's but it is not a death knell for them. There is a whole world out there, and our manufacturer's will pay a bit more in transporting things, but it will end up selling more to these other countries. Russia and Canada are growing a very large trade relationship, and the same goes for most of the European countries and such. Do not get me wrong I think we still would rather trade with the USA, and that probably will be our main trading partner even with the high CDN, but for those areas where trade just dries up, Canada will seek new trades with others to fill the needs and also our ability to survive.

The one thing that seems to be driving alot of this is the world price for oil. You know that no matter how high this goes, the USA will have to pay the price. Even if all the alternative fuels started to be used tommorow, the USA will still have the biggest thirst for petroleum, in all the world. Even it you drilled al the oil in Alaska and pumped every oil reserve dry, you still would not be seld sufficient in that. That can abd will be your achilles heel. Not to mention that most of the things the people of the USA have gotten used to are imported and that will mean large price rises, and more having to do without. But most of this is not things that can not be done without, but rather things to add to comforts. The USA will survive and it will do so even if the USD goes really down, like it did with the CDN. Life style is about the only thing this will cost the people. I am not sure that the people will not see this and willingly accept it and work for new strong ways from there. Just as we here in Canada did not give up hope when things were rough, I think the same will be said of the american people when the times get rough there.

Smallc · November 6, 2007

He is doing "something"....maintaining a weak dollar policy by design. In comparison, the loonie is very strong and you guys are beginning to squirm!

Squirming.....really....Tell that to our federal government. We are not a consumer based economy like the US.

mikedavid00 · November 6, 2007

Squirming.....really....Tell that to our federal government. We are not a consumer based economy like the US.

Aint that the truth.

I looked on Amazon.com for a book it was $19.

It was $41 at Chapters.ca

Actually, I remember posting something about Ikea a while back. Now they claim they have lowered their prices... hmmm.. i wonder if they have.

(lol... just heard on CBC 'he celebrated his CHINESEINESS'). No joke.

K back on topic.

http://www.mapleleafweb.com/forums//index....st&p=251290

That was my post Sep 19 2007, 11:40 AM .

Did Ikea really lower prices?

http://www.ikea.com/us/en/catalog/products/S39841326 - $399

http://www.ikea.com/ca/en/catalog/products/S39841326 - $599

NO THEY DIDN'T.

LIES, LIES, LIES... IN CANADA. AS USUAL

Smallc · November 6, 2007

Aint that the truth.
I looked on Amazon.com for a book it was $19.

It was $41 at Chapters.ca

Actually, I remember posting something about Ikea a while back. Now they claim they have lowered their prices... hmmm.. i wonder if they have.

(lol... just heard on CBC 'he celebrated his CHINESEINESS'). No joke.

K back on topic.

http://www.mapleleafweb.com/forums//index....st&p=251290

That was my post Sep 19 2007, 11:40 AM .

Did Ikea really lower prices?

http://www.ikea.com/us/en/catalog/products/S39841326 - $399

http://www.ikea.com/ca/en/catalog/products/S39841326 - $599

NO THEY DIDN'T.

LIES, LIES, LIES... IN CANADA. AS USUAL

Prices are coming down, it just takes time.

M.Dancer · November 6, 2007

I won't take the sides of retailers who have had a year to adjust prices as we approached parity BUT>>>>>

>>>>>comparing prices of overseas imported products in the US to the same products found in Canada doesn't fly.....this concept is probably too difficult for some but Canada doesn't have the same trade agreements as the US does. You buy an overseas imported product here, yolu are payning a Candians duty.....in the states it may be quite a bit less.

The only way you can compare is for items made in North America.

White Doors · November 6, 2007

I won't take the sides of retailers who have had a year to adjust prices as we approached parity BUT>>>>>
>>>>>comparing prices of overseas imported products in the US to the same products found in Canada doesn't fly.....this concept is probably too difficult for some but Canada doesn't have the same trade agreements as the US does. You buy an overseas imported product here, yolu are payning a Candians duty.....in the states it may be quite a bit less.

The only way you can compare is for items made in North America.

Like a Cadiallac Escalade? 80k here and 40k there???

Duties make up a very small % of the cost of something.

M.Dancer · November 6, 2007

Like a Cadiallac Escalade? 80k here and 40k there???
Duties make up a very small % of the cost of something.

Try 57k USD

http://autos.yahoo.com/2007_cadillac_escalade_awd/

and 76K

http://www.royfoss.com/newvehicles/core/ma...lade/index.aspx

M.Dancer · November 6, 2007

Luxary cars though are an extreme example.....take winter wear for example.......

But import duties can vary widely. In Canada, the duties on skiwear are as high as 25 per cent, Schure says, while in the U.S. he pays just 8 per cent.
When added to the original price, the cost of the jacket destined for Skiis and Biikes is now $147 (Canadian), but for the U.S. market it's only $108 (U.S.).

http://www.thestar.com/Business/article/271015

old_bold&cold · November 6, 2007

I will not even begin to take the greedy commercial side in this. I did some checking about Four post automobile lifts, and was interest in a commercial on not the parking hoists that are advertised. The US company that sells these do so at $2560.00 USD shipping to me here in Canada would be $600.00. The Canadian distributor for these say he wants $5350.00 and I would have to pick it up or pay $400.00 shipping. He said that he had to pay a 38% duty on these as since the inner chains and pullies are fro Asia they then have this duty. I checked with the Customs people and they said that things like hoist made in asia are accessed a 6% duty plus the CSA certified sticker, about $35.00. Of cours ehtn the GST and PST but that would play either way. The Canadian dealer said that he pays $800.00 shipping from the USA and he would have to order this as he was out of stock and it would be 3 weeks. So it tallied up that he was selling these at 110% profit from the retail in the USA and I am sure he buys at even lower then that. He lied about his shipping and alos about the duty he paid, just to try an justify his prices. He had to order it and so there was no high paid stock he was having to go thru.

Needless to say that I bought from the USA supplier and when it cleared customs there were no duties as more then 80% of it was produced in the USA, and the shipping to my door was $600.00. I also paid a customs company $120.00 for the paper work and clearing issues. Now had that Canadian distributor lowered his price to say $3,200.00, and I would pay the shipping from his place at even the $400.00, he would have made about 40% or more profit. But because he was greedy, he will get zip. I have many more things I wish to buy but now I am waiting to get the GST cut in January. If Canadian dealers do not have price parity by then, they can go bankrupt as far as I am concerned.

geoffrey · November 6, 2007

Agreed ob&c.

No need to pay more here when Americans are willing to sell to us for less. Canadian companies will adapt, or go out of business, as they should.

bush_cheney2004 · November 7, 2007

I am definitely not squirming and neither are our bankers or anyone else for that matter. Yes the low USD will affect our manufacturer's but it is not a death knell for them. There is a whole world out there, and our manufacturer's will pay a bit more in transporting things, but it will end up selling more to these other countries. Russia and Canada are growing a very large trade relationship, and the same goes for most of the European countries and such. Do not get me wrong I think we still would rather trade with the USA, and that probably will be our main trading partner even with the high CDN, but for those areas where trade just dries up, Canada will seek new trades with others to fill the needs and also our ability to survive.

Yes, yes, yes...we have heard this for years now, yet 85% of your exports got to one place on this whole damn planet.

The one thing that seems to be driving alot of this is the world price for oil. You know that no matter how high this goes, the USA will have to pay the price. Even if all the alternative fuels started to be used tommorow, the USA will still have the biggest thirst for petroleum, in all the world. Even it you drilled al the oil in Alaska and pumped every oil reserve dry, you still would not be seld sufficient in that. That can abd will be your achilles heel.

The world's is a hydrocarbon economy, and even Canada is not "self-sufficient", relying on oil imports and refined distillates from even the (gasp!)...United States. There would be no oil patch boom in Canada without the Americans...from investment capital to market demand. The "price" for oil is market driven, and the USA produces far more oil than Canada.

Smallc · November 7, 2007

Yes, yes, yes...we have heard this for years now, yet 85% of your exports got to one place on this whole damn planet.
The world's is a hydrocarbon economy, and even Canada is not "self-sufficient", relying on oil imports and refined distillates from even the (gasp!)...United States. There would be no oil patch boom in Canada without the Americans...from investment capital to market demand. The "price" for oil is market driven, and the USA produces far more oil than Canada.

Less than 85% of exports now go to the US.

bush_cheney2004 · November 7, 2007

Less than 85% of exports now go to the US.

No doubt....wait and see how much less with a $1.20US loonie!

jdobbin · November 7, 2007

Less than 85% of exports now go to the US.

We'll have to sell to richer countries instead.

Smallc · November 7, 2007

No doubt....wait and see how much less with a $1.20US loonie!

But yet, the economy is in very good shape. We are diversifying our export portfolio, a very smart move.

Wilber · November 7, 2007

The world's is a hydrocarbon economy, and even Canada is not "self-sufficient", relying on oil imports and refined distillates from even the (gasp!)...United States. There would be no oil patch boom in Canada without the Americans...from investment capital to market demand. The "price" for oil is market driven, and the USA produces far more oil than Canada.

Yes we do import some refined products but when it comes to crude oil, Canada imported just under a billion barrels of oil a day in 2005 while exporting nearly 1.6 billion. We are more than self sufficient when it comes to crude.

bush_cheney2004 · November 7, 2007

But yet, the economy is in very good shape. We are diversifying our export portfolio, a very smart move.

Yay! Let's hope for a $2.00US loonie. What use to be just a trickle of spendthrift border Canucks looking for cheap gas and cigarettes will turn into a torrent of shoppers for wide screen televisions and cars!