It seems the Canadian Dollar is again rocketing up in value compared to it’s anemic continent-mate the once mighty U.S. Dollar, which could mean many different things to us Canadians such as:
- We need bigger wallets because our money is worth so much more. OK, that is a joke. However, Canadians travelling to the U.S. or buying U.S. securities are getting “deals” now due to the Canadian Dollar’s high value. Maybe it’s time to think about buying some American assets. How about going to the States and buying your snow tires down there? It might be cheaper, too!
- Canadian Workers are no longer just lazy and shiftless; we are bloody expensive, too. Again, this is a weak attempt at humour. Still, it is very bad news for Canadian Firms attempting to sell either their services or their products into the U.S., as our products have increased in value without us doing anything.
- The Canadian Dollar might become the “World Standard” for money, yes, another weak attempt at humor, the Euro is more likely to take that mantle away from the U.S. greenback very soon (if not the Chinese Yuan).
- Given our dollar is only worth 0.65 of a Euro and 0.61 of a Pound Sterling maybe we shouldn’t worry so much? That’s a naive answer, our biggest trading partner is the U.S. and if they stop buying our stuff, it is going to hurt, but luckily some of the stuff they buy they really need, like Oil. Given oil prices have dropped, not as much, but our American Cousins are still addicted to Crude and we are their major pushers right now.
Does this mean the Canadian economy is so much stronger than the American? Um, no, it means the U.S. economy is in bad shape, but it can easily drag Canada down as well, so it behooves us to help our U.S. comrades to get out of this Economic Funk and get back to their free-spending ways (and of course Buy Canadian!).
Conclusions?
Before the Loonie drops again, maybe whip across the border and pick up:
- Snow Tires
- Some electronics stuff
- Clothes
- A Whole Market ETF
and, of course, remember to declare it all at the border (and bring your passport, too).
