Ever since Sidney Crosby scored that monumental golden goal in overtime to capture the gold medal in the 2010 Winter Olympics’ men’s hockey tournament, Canada has been abuzz with feelings of dominance over its neighbours to the south. In many ways, the Canadian dollar is currently battling it out with the American dollar in a similar feat of power.
As Stefania Moretti of QMI Agency reports today on The Toronto Sun‘s website, “the loonie continued its flight toward parity Wednesday hitting 99 cents US at one point pushed forward by solid commodity prices, a renewed low rate pledge south of the border and better-than-expected Canadian wholesale trade numbers.”
And while the Synergy Merchant Services Blog visited this topic last week, it keeps a close eye on the current Canada VS. The United States dollar battle, especially considering the impact that it will have on the nation’s economy. For many, the Canadian dollar winning this battle will mean greater difficulty in the nation being able to sell its exports.
Industry Minister Tony Clement reiterated these sentiments earlier today: “All of these things have a cumulative effect that we expect will more than overcome the fact of the high dollar…In the past, it’s been a challenge for companies in Canada because of the fact that they relied historically on the lower dollar to be their productivity and competitiveness edge.”
As Moretti writes: “Clements’s views echo a report released by the Conference Board of Canada earlier this week that said manufacturers in this country are increasingly flexible when it comes to currency fluctuations because there are more international hedging options available to them than ever before.”
Jack Spitz, the National Bank’s director of foreign exchange believes that Canada could overtake the lead in the currency war as early as this Friday. Said Spitz: “There’s little in the way of market events that can stop it.” The only question that remains, asserts Spitz, is how long the loonie will be able to maintain its stronghold over the American single.
The boost in value for the Canadian dollar comes at the hands of a number of factors. As has been reported recently, the national economy is growing at a quicker rate than anticipated. In January, the nation experienced its biggest increase in sales at the Canadian wholesale level in three years.
Based on reports from Statistics Canada, Moretti writes that “sales were up across all sectors and by an average of 3% to $44.4 billion during the month.” With the economy continually headed in the direction of growth and improvement, it only furthers the belief that the loonie will soon become dominant over the U.S. greenback in terms of value.
How this will inevitably affect the Canadian economy is yet to be determined. But many Canadians, still likely on an emotional high after the dominance shown by their countrymen at the 2010 Vancouver Olympics, are likely rooting for the loonie to gain a victory over the American dollar soon.