Why is the Canadian Dollar dropping?

[pinhead]

Can anyone explain why the canadian dollar has dropped to .79 cents now? What has caused this significant shift?

[Doctor Sinister]

Many factors can explain this, but basically the American economy is dragging the dollar down as their need for commodities and raw material (oil, wood etc.) has dropped significantly. Since we have such a close bond to the US, we suffer indirectly ... the Canadian dollar is also caught up in the world economy debacle right now (the Canadian dollar has become unreliable due to our unstable economy) and it should drop lower in the coming weeks, that's for sure.

[Gettin'r'round]

The main reason is the flight to safety. With banks failing and uncertainty in the sector in general people/businesses want somewhere safe to park their cash. This safe place, believe it or not, is the US gov't Treasury Bills or T-bills for short. The US is the worlds biggest economy, has the largest army and is a democracy. Plus should the US default on it's T-bills the world is ****ed anyway. So people are buying T-bills which of course are in US dollars, and when something is in high demand, the price goes up. So the US $ is going up based not on economic factors but fear and uncertainty. These T-bill investors are only getting .3% return to boot. So our dollar is going down on US dollar strength.
The crash of commodities prices are also not helping our dollar as well. Plus our economy is tried to the US one and our cut in interest rates didn't help either. A perfect storm.
This is not ideal for the US. One bright light in the US economy is the export sector, which is going to get hurt by the high dollar. Also to note is that the US fed has pumped trillions into the system which would normally debase the currency and cause it's currency to collapse. However the opposite is true in terms of the current dollar value. In fact the Canadian gov't is in a much better financial state with a strong banking system.
This current state of affairs is simply unprecedented.

[Baconbits]

It's almost not worth ordering bulk protein anymore from the states, by the time one converts everything...it's pretty much the same price as here now!

[faller]

This is great news!!

[420]

hey at least gas prices have gone down a bit.

[Big D]

hey at least gas prices have gone down a bit.

ya 30$ gives me a quarter tank now woohoo :ji

[natenator]

ya 30$ gives me a quarter tank now woohoo :ji
don't drive a truck or an SUV ;)

[Redz]

The main factor is oil prices droping. The uncertainty in the economy in banks is not a big factor as our banking system in Canada is regarded as the best in the world even in times like this. Its not a bad thing for the manufacturing sectors though.

[wrought]

hey at least gas prices have gone down a bit.

Oil now costs under $70US/barrel....we're still paying about $1CDN/L. When the future's price was spiking in the summer do the increased speculation as traders rushed to shift their money from the housing market to commodities our cost at the pump pretty much mirrored the spike ($138/barrel = $1.38/L), but now that the price has dropped the cost at the pump hasn't fallen to match the market.

Or to say it another way, the ****ing ****ers are just ****ing us for ****'s sake.

...oh yeah, and our dollar sucks cuz we're tied to the US and are part of the instability blahblahfukityfukity...i just wanted to vent about the gas prices. :friday

[natenator]

Oil now costs under $70US/barrel....we're still paying about $1CDN/L. When the future's price was spiking in the summer do the increased speculation as traders rushed to shift their money from the housing market to commodities our cost at the pump pretty much mirrored the spike ($138/barrel = $1.38/L), but now that the price has dropped the cost at the pump hasn't fallen to match the market.

Or to say it another way, the ****ing ****ers are just ****ing us for ****'s sake.

...oh yeah, and our dollar sucks cuz we're tied to the US and are part of the instability blahblahfukityfukity...i just wanted to vent about the gas prices. :friday
lol

nice

[tex]

sucks for ppl up here....but good for manufacturing and tourism

[macka]

I was chatting with a friend back home and he said that the demand for pulp has skyrocketed and they are restarting the old mills as they are now worth operating due to the low US dollar. The irony is now the Ontario gov is moving to make environmental levies above and beyond what was already required in the forest industry.

[ironwill]

I was chatting with a friend back home and he said that the demand for pulp has skyrocketed and they are restarting the old mills as they are now worth operating due to the low US dollar. The irony is now the Ontario gov is moving to make environmental levies above and beyond what was already required in the forest industry.

Talk to him again, i think he is very optimistic...The pulp prices have dropped right off once again...2 months ago, you are correct, it was doing well, now not so much...the dollar drop is helping, but definitely not enough to restart mills that are shutdown, that is many millions of dollars...Its not happening anytime soon, rest assured..

[Neavris]

Yo, I've read the "Canada has the soundest banking system in the world" article also a month ago and I was wondering: What makes our banking system so good?

[C.Cruise]

The main factor is oil prices droping. The uncertainty in the economy in banks is not a big factor as our banking system in Canada is regarded as the best in the world even in times like this. Its not a bad thing for the manufacturing sectors though.

As the price of OIL drops so does the Canadian Dollar. As oil rises so does the dollar, When our dollar was at 1.10 US the price of oil was super high.

[UkrainianGuy]

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[Gettin'r'round]

Well finally as the world's banking system stabilizes people are realizing the US is a shit place to be. 0% interest rates, trillion dollar defects, "quantitative easing" aka debasing the currency, left wing gov't, rising unemployment, collapsing car makers, collapsing housing markets, geeze any good news?

Seeing this, all the people who flooded to buy US t-bills when the banks were failing (the US gov't is the world's safest creditor, hell if the US won't pay it's debts, we are all ****ed anyway) are now selling their tbills and putting them in Yen, Euros, CDN and pound sterling. More sellers than buyers = sinking prices.

[tex]

high canadian dollar leads to shrinking interest in canadian exports......and bad for tourism as well......

[Bowlcut]

Pound and Euro are both ****ed. Sterling is going to be hit hard in the next few years, and the Euro won't last for more than 20 decades. Within 20 years the deficits run by governments in western Europe will be massive unless something drastically changes and as we all know governments love to print what they can't tax.

[Gettin'r'round]

China will soon own us all.