An important news item that the Synergy Merchant Services Blog has been following for the past few months is the growing strength of the loonie. The Canadian dollar has been slowly creeping up on its American counterpart over the past year and now sits closer than ever. According to a report published today by QMI Agency’s Sharon Singleton, the loonie is at its highest level in 20 months, currently sitting at 99.90 cents US.
It doesn’t get much closer than that. And as we have mentioned in blogs past, this occurrence could potentially allow for Canadian consumers to get more bang for their buck while travelling this summer. Canadian businesses, on the other hand, fear that the rising loonie could affect exports.
The continued strengthening of the Canadian dollar has been supported by the growing oil prices that are propelling the nation towards being among the top in the world in overcoming the recession. As Knightsbridge Foreign Exchange President, Rahim Madhavj puts it: “This is the new reality for Canadian business. As long as oil prices continue to trade at between $85 to $100 a barrel, the loonie will oscillate around par.”
In addition, Singleton reports that the demand for oil is, in fact, expected to increase due to strong expansion in China as well as other “emerging economies”. She notes that while economists expected the Canadian dollar to reach parity with the US dollar this year, it was not anticipated so quickly. Economists see it as “imminent” at this point.
Interestingly, Bank of Canada Governor, Mark Carney is urging “businesses to take the opportunity to invest in equipment to upgrade their business and boost productivity.” A common recommendation by all of our funding specialists here at Synergy, investing into your business in an effort to generate greater profits has never been as good an idea as it is now.
While the stronger Canadian dollar may deter American shoppers from crossing the border for the purposes of shopping, the loonie’s increased worth will most certainly be beneficial for those looking to grow their businesses by buying new inventory, equipment or even advertising.
As always, it is hard to determine just how long the loonie will remain as strong as it is now. It is expected to hit parity any day now and perhaps surpass the value of the American dollar shortly thereafter. Utilizing this time to get the most out of your dollar may be the key to taking your business to the next level.
To receive a free quote with no obligation to enter into our cash advance program, simply give Synergy a call at 1-866-299-0101 today. A simple review of your monthly merchant statements is all it takes to find out how much you will be approved for and how much the cash advance will cost you. With the loonie as strong as it is now, you may want to get your hands on as many of them as you can.