Tuesday the American dollar closed down nearly another
half cent against the Canadian dollar known affectionately as "the loonie".
What does this mean? Americans will have a harder time travelling out of the country as their money is worth less in other places. It also becomes more expensive to import products from countries with stronger currencies. Over the past year the Loonie has risen about 5% against the US$, meaning the Canadian exports are suffering while importers in the States either have to buy less from the north, or take an expense hit they can't avoid.
TD Waterhouse has the updated Canadian dollar value.
What's caused the Canadian dollar to regain value that it hasn't seen since the mid 1970s? A combination of things has contributed, including the interest rate in Canada, the state of both country's economies, and national debt levels. The Bush administration has spent a great deal more than they are taking in, and when that happens, the value of currency tends to go down.
Long term, a stronger Canadian dollar will benefit Canada more than the States, since investors like a bullish currency, and so do Canadian travellers and consumers. Mobility of Americans will be decreased, as they will have less ability to afford homes based on their American assets.
Look for the Loonie to hit 95¢ US by the end of 2007.