Loonie reaches parity with U.S. dollar
The Canadian dollar, nicknamed the Loonie, managed to reach parity with the U.S. dollar today. The outlook for exports has improved with high job creation numbers in the U.S. Ironically if the dollar goes too high exports could suffer since the high dollar makes Canadian goods more expensive for U.S. buyers.
The value of the Canadian dollar rose for a fourth week. Stocks and crude oil also rose.Futures traders have now reversed bets and are betting that the Canadian dollar will rise more against the U.S. dollar.
Adam Button an analysts from Montreal said:“It’s nice to see the Canadian dollar break through parity, but you have to be a little bit disappointed with the follow through,” “There seems to be plenty of eager corporate sellers of the Canadian dollar around parity.”
The loonie is up by .2 per cent this week alone. A Canadian dollar buys just a little over one U.S. dollar.Greg Anderson at Citigroup Inc.advised investors to buy Canadian and Australian dollars against the Euro which is declining against both currencies.
Generally an improvement in the U.S. economy will help Canada since we export so many raw materials to the U.S. Almost three quarters of all Canadian exports are to the U.S. Canada also is the biggest supplier of crude oil to the U.S. If the U.S. economy declines so will demand for Canadian exports.For more see this article.