Dollar Soaring, Will Exports Slide?
By 250 News
Wednesday, September 21, 2005 04:02 AM
How high will the loonie go? That's the question causing different reactions across the country.
A higher dollar means good news, if you are importing goods (including fresh citrus fruits and vegetables) or planning a vacation in the United States.
On the other side of the coin, it is not so good news for exporters, particularly lumber because their product now becomes more expensive for Americans.
The boost is linked to the rising cost of oiland there was a time yesterday when the dollar was trading at 85.80 cents U.S. Thatwas .06 more than the 13 and a half year high close Monday of 85.74
There are some interesting factors that could make some changes in how things play out. Hurricane Katrina has left the United States hungry for lumber, so despite the new higher price, the demand may over ride the cost factor.
On the downside, it also means the manufacturing sector can't use the cheap dollar as a bargainning chip to stay competitive.
It has been 27 years since the loonie topped the 90 cent us mark.
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Posted by: acrider54 on September 21 2005 6:22 PM
It was on par or better for most of the 50's and for the first half of the 70's.
The 70's were certainly booming for this part of the world, but not the secondary and tertiary manufacturing belt of the country.
It started dropping in the post VietNam era ..... rising under Bush 1 ... plummetting under Clinton and the tremendous, but inflated, economic growth of the USA, reaching the lowest point in 2001 ... and now under Bush 2 once more rising in value. ....
Naturally, the USA economy is a good indictor of the value of the C$ ....
we really need to do work on diversifying our trade relationships with the rest of the world if we are to reap any benefits from a higher C$ .... our trade surplus will dwindle very quickly otherwise, followed, of course, by a declining C$ .....