Toontje

I don't know nuffin 'bout economy too, but when the cdn$ gets more expensive, we get less dollars for our pounds/euros. So I think that all of us who are still on this side of the ocean are all hoping that the CDN$ will become cheaper. That will give us more Loonies for our money once we land in Canada.

oceanMDX

Wrong! Canadian rates have been going up because the Canadian economy has been strong.

SANDRAPAUL

Nice exclamation mark. Said I knew nothing about economy on a global scale. I have just managed to run a business for the last 15 years and I am still here. Many are not. Mind you I took a while to learn VAT rules when I first started.

HaMa

the past few days following the elections have been a bit of the mess for currency markets, rallies werent as big as expected,
us$ agaisnt $C was 1.2272 on the 3rd nov, and dropped and is still dropping till today now at 1.1928,

the us dollar has been weakening across the board,
against the sterling

$/£ was 1.8360 on the 3rd and climbed steeply and is at 1.8610 today, theres been a steady weakness since the begginning or october, going from a low of 1.7750 and now at 1.8610, that is a big jump for just about a one month period
the dollar seems bullish on the £, hopefully it will hold its steady out later this month or so,

if anyone is looking for charts for currencies a good free site to use without need for registering is http://www.dailyfx.com/FinanceChart.html , u can select the currency pair u want from under instrument and timeline under time scale,

HaMa

CalgaryAMC

It's easy to understand really.

Let's say you happen to have a British savings account and a Canadian savings account. The British bank is offering 5% and the Canadian bank is offering 10%. So naturally you want to move all your money into your Canadian account.

Well this transaction actually involves selling British pounds and buying Canadian dollars. It's hard to imagine currency being bought and sold, but that's exactly what you do every time you go to a bureau de change.

Now this whole buying dollars and selling pounds wouldn't matter if it was just you. But let's imagine that millions of people (companies, banks and other organizations really) want to do the same thing. Well that's a problem because, for our purposes, the total amount of Canadian dollars in the world is fixed. There just isn't an infinite amount of them.

And that's where exchange rates step in. The currency market solves the problem by simply increasing the price of dollars until the supply of them equals the demand for them. What price is that? The price that exactly makes moving your savings not worthwhile. After all, what use is earning another $0.05 in interest on every dollar you save if it costs you $0.05 to get the dollar in the first place.

So in order to know what the future exchange rate should be, you would need to know two things:

(1) what Canada's interest rate is going to be
(2) what the UK's interest rate is going to be

And nobody knows these things. You can guess them, and that's what currency speculators do every day. But because they are speculators, they are speculating on what they think the future holds, not on what the reality will actually be. So if speculators think that in 6 months time Canadian interest rates will rise, and UK rates will fall, well then that prediction is represented by TODAY'S exchange rate. That's the thing with speculation. It's like betting. By the time you know the result of today's bet, you're already betting on tomorrow's horse.

waitingforever

3 main reasons why Canadian Dollar is going up
- Canada is a net exporter of oil. every time oil goes up Canadian stock markets( TSX etc) also goes up.
- rising commodity prices for many primary products due to increased demand from countries like China, India
- the only G8 country to have a surplus. huge deficits lower currency value.

Bleech

It's 2.10822 today
Not good if you're planning on moving over a lot of £s.

ginaf

Sorry for the long copy and paste, but you need to be registered to view this via The Star online:-

Are good times about to end?
Experts warn cost of oil, 85-cent loonie threaten Canada's sizzling economy

STEVEN THEOBALD AND SHARDA PRASHAD
BUSINESS REPORTERS

You might think Canadians had rarely had it so good. Our dollar is at a 13-year high, Canada's benchmark stock index just hit its best level in five years and is within sight of breaking its record, and the housing boom continues unabated.

But economists caution that our recent prosperity is a double-edged sword.

Manufacturing jobs are in jeopardy, interest rates are heading marginally higher and housing construction is expected to slow, they say.

And average consumers are going to be squeezed by higher energy prices.

"It's a mixed story, that's what it is," said University of Toronto economics professor Peter Dungan.

The dollar surged yesterday to close at 85.57 cents (U.S.), up 0.73 of a cent and the highest close since January 1992, passing a threshold many economists say will begin to threaten more manufacturing jobs as Canadian exports become increasingly expensive.

Meanwhile, Canada's premier stock index, the S&P/TSX composite, closed at 11,024.73, the highest since September 2000.

Both were boosted by the price of oil, which in turn was driven up by fears that Tropical Storm Rita could hit the energy industry in the Gulf of Mexico this week in the midst of attempts to recover from the devastation of Hurricane Katrina.

Indeed, crude oil futures soared more than $4, marking the biggest one-day jump on record. Benchmark light, sweet crude for October delivery rose $4.39, or 7 per cent, to settle at $67.39 a barrel on the New York Mercantile Exchange.

The Canadian dollar has become a foreign-exchange speculator's currency of choice when oil prices surge.

And the "petro-loonie" could keep driving higher.

"If energy prices continue to escalate and the Bank of Canada doesn't sound any alarm bells, the Canadian dollar could go toward 90 cents," said Steve Saldanha, chief foreign exchange strategist at TD Securities.

Big gains in real estate and stock markets are helping keep consumers spending by making them feel wealthier. And borrowing has never been easier, thanks to ultra-low interest rates and flexible loan schemes.

But consumers will start feeling the pinch of skyrocketing energy prices this winter when home heating bills start rolling in, warned Andrew Pyle, senior financial markets economist at the Bank of Nova Scotia.

The high dollar and soaring energy costs will probably stop the Bank of Canada from raising its trend-setting interest rates much this year, perhaps only one more quarter-point increase, Pyle said.

Added senior economist Benjamin Tal of CIBC World Markets: "The economy will not be as strong as last year. Basically, there will be marginally higher interest rates, a strong dollar, high energy prices, and the housing market will level off."

Tal also believes the labour market is softening.

"At the beginning of the year, there were close to 20,000 to 25,000 new jobs being created (per month), and now there's about 15,000 new jobs," he said.

Canada is an exporting country, Tal added, so a strong dollar hurts the manufacturing sector.

Approximately 85,000 manufacturing jobs have been lost since the beginning of the year because of the high dollar, as one of Canada's competitive advantages is its low dollar, he said.

Higher energy prices also threaten both consumers and central Canada's manufacturers. The strong currency, which tends to rise when interest rates increase, is also a big problem for exporters facing intense competition from Asian rivals.

"This is clearly, clearly a double-barrelled challenge for the Ontario economy to have the dollar at a 13-year high and oil prices taking off again," said Doug Porter, deputy chief economist at BMO Nesbitt Burns.

National Bank Financial chief economist Clément Gignac pointed out Canada is alone as a net energy exporter among the Group of Seven nations, and the only one with a balanced budget. "So suddenly the country looks like a safehaven."

He says lower demand for oil from Asia will bring the oil price down to $50 a barrel and the dollar to 83 cents next year, "but in the short term, God knows."

Underscoring the impact of energy prices on Canadian equity markets this year is the fact Calgary-based energy producer EnCana Corp. slipped past the Royal Bank of Canada to become the country's largest company by stockmarket value.

steve of 5-0

Last night the $CDN dollar closed with the power to buy $US 0.85 cents.
The $CDN is like all other currencies going strong against the $US, as speculators jump in on the panic over the US economy.
The US economy is being allowed to run like this by their own government for a while and they rely on the oil companies to keep new well caps closed so as to generate high gasoline prices, which enables "back door" taxation.
This in turn funds the Iraqi conflict, the run away US economy is an exercise in muddying the water, so as to to fight an expensive war.
Canadian economy is 80% tied to USA, but is also partly tied to Europe, Canada being in the middle enjoys an improved $CDN against the $US, but a weakened $CDN against the £UK.
The $CDN will drop to only 2 for 1 soon. The days when one got nearly $CDN 2.5 to the £UK, are gone!

MarkG

The amusing thing is, the more of us who rush out and transfer tens or hundreds of thousands of pounds into Canadian dollars, the higher it will go, at least in the short term . I wouldn't be surprised to see it hit $2.20 again next year if the price of oil drops due to lower demand in a recession, but doubt it will reach $2.50.

As the article pointed out, compared to Britain and America, Canada does look like a safe haven for money right now (plenty of oil, reasonably sane economic policies and rising interest rates)... but if the US economy goes into a recession next year then it will probably pull Canada down with it. Equally, if there is an election next year, who knows what impact that would have?

steve of 5-0

Bush will go full term for the benefit of his pals in business makin` the money,
he cannot go for a third term, it`s in their constitution, so (pardon the spelling) his crowd will front Condalisa Rice, the first black woman to run, so as to salvage what black vote there is. Plus it will be a way for the haves to carry on having, along with the "new money" haves, which include some of the black population. Also we will see a new black judge appointed to the supreme court, all this to appease the New Orleans outcry, that came from around the world. The Republicans will then treat the new president like the current, a primed easy to operate puppet!

MarkG

Actually, I was talking about the rumored Canadian election next year: personally I still think they'll either push back the corruption report for years or find another way out, but obviously some people still expect it to happen.

steve of 5-0

Had tea with Doctor Who today, he says it went down to 2 to 1 in ................................2006!!!!!!!!!!!!!! !!

Cowtown

Actually ... if you want to make some money right now, invest in Latin America ... the economy down there is going nuts.

Personally? I think the US is going the way of the USSR ... with increasing competition from more stable economies to the north and south, Social Darwinism is going to prove as effective long term as socialism ... going to war with countries like Iraq hardly boosts their economy in the same way that the cold war did.

As for the US going to the moon by 2020 - if they don't speed up, China will get there first