Loonie Approaching U.S. Dollar Value
What was it? A year ago? Two?
It wasn't all that long ago when the Canadian dollar had amazingly topped the U.S. Dollar in value in what was, for many, a shocking occurrence. Sure, it only lasted maybe a few days or was it a whole week? – but the satisfaction of knowing that our loonie was somehow worth more than an American “single” for even a day was an unbelievable feeling.
Bursting with pride, many Canadians jokingly took advantage of their American friends and relatives by insisting upon Canadian currency for the settling of minor bets. Even more overwhelmingly than normal, a number of Canucks headed south to take advantage of the potential savings brought on by their stronger currency.
In a report released earlier today by The Canadian Press, it would appear as if the possibility of this recuring may not be too far off. The Bank of Canada has predicted that by the end of the year, the value of the Canadian dollar may find itself on par with its American counterpart.
The loonie's recent growth has lead economists to this conclusion. Says the report: “The loonie has appreciated more than two cents during the past few trading days and many are projecting it could attain parity by the end of the year. It closed at 92.64 cents U.S. yesterday, after briefly hitting 93.44.”
Bank governor Mark Carney warns Canadians about premature plans to take a trip to the United States for the purpose of shopping, suggesting that such action may put the strength of the economic recovery in jeopardy.
Avrim Lazar of the Forest Products Association of Canada had this to say: “We export more than two-thirds of what we make, so any sign of recovery will be undermined by the dollar going up. Mr. Carney is right to be concerned and he's right to look at all tools at his disposal.”
Of course, it is important to remember that while the loonie seems to be strengthening, it is not quite equal to the American dollar as of yet. And perhaps, it never will. Canadians should caution themselves against unnecessary spending and keep in mind that there is still work to be done to overcome the financial crisis facing the nation.
However, if the loonie, does once again topple the U.S. “single”, it would be nice to rub it in the faces of the Yanks just one more time.