Canadian consumers think that it is not a big saving when buying in domestic market because of the surging loonie. They are being urged by some groups to travel to the United States of America if they want to benefit from nearly parity with the American dollars.
It is possible for Canadian dollars to be equal to US dollars any point soon, following a huge leap Tuesday after United States of America Federal Reserve surprised investors by cutting its key interest rate by half a percentage point.
Today (Wednesday), the currency is now at 98.5 cents U.S., after nudging 99 cents overnight.
new record price for oil of more than US$82 per barrel and a Lower U.S. interest rates sent the loonie rocketing upwards – taking hopes of cheaper U.S. imports along with it.
Even though the loonie is at its highest level since January 1977, after the Fed announcement, many economists say “it could be up to two years before consumers see any effect at Canadian stores, if the loonie remains at current levels.”
In my opinion, there is an advantage and disadvantage for loonie’s currency to be higher and US currency is going down. The advantage is that when traveling whether for business or tour, you will spend less money than before. Also when applying for universities in US, it will cost cheaper. By making Canadian currency higher, it will be very beneficial to Canada’s image and will be beneficial to people who work in Canada. However on the other hand, because my father is working in Korea and sending money for school’s tuition and etc…, my father will have to work harder than before and will not be benefit for me.
Article from http://www.thestar.com/Business/article/258299
2 comments:
Jason, You did a very goodjob summarizing this article. I also have same opinion as your because my dad sends the money to Canada in Canadian currency for School tuition and etc..However, My brother goes to university in New york so it will be the same to our family.
Jason, I agree with your opinion on that there is a positive and negative side for the value of Canadian currency sky-rocketing. However, I think that it will affect Canadians towards the negative end more than positive end. When the value of loonie increased, all it did was make Canada's economy stronger, but it did not directly affect the people. However, as the value of loonie went up and the value of American dollar went down, the industries that traded with US that is in Canada met a crisis because they now had to handle extra money as the Canadian currency went up. This in fact caused industries to lose billions of dollars and the manufacturers in Canada had to close down due to this.
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