CAD$ vs US$...The highest record !?

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CanTexan

It isn't the highest record - the last time the Canadian dollar was higher than the US was back on Nov 25 1976 ($1 CAD = $1.04 US) and certainly lower than the 1960's ($1 CAD = $1.18 US between 1964-1968).

As to why:
Canada, the world's eighth-biggest economy, has benefited from rising demand for copper, gold, wheat and oil from neighboring US and emerging economies such as India and China. The country is the world's largest producer of uranium, the second-biggest exporter of natural gas, and sits on the largest pool of oil reserves outside the Middle East. Canada is also the world's second-largest exporter of wheat, which rose to a record this month.

The Reuters/Jefferies CRB Index of global commodities has risen 69 percent since January 2002 on growing demand from China and other Asian economies, boosting the value of Canadian exports and triggering investment in new mines and other resource projects. Canada's economy will be the fastest-growing among the Group of Seven nations in 2008, with an expected pace of 2.9 percent, the International Monetary Fund estimated in April.

Foreign investors are rushing into the country to tap into the boom, boosting demand for the Canadian currency. Canadian companies have been involved in announced takeovers worth $287 billion this year, surpassing the record $275 billion for all of 2006. The dollar almost gained a full cent on July 12, the day Rio Tinto Group offered $38.1 billion for Montreal-based Alcan Inc., the world's No. 2 aluminum producer.

Canada, which has run 10 consecutive annual budget surpluses, is using the world's growing reliance on its commodities to bolster its stature globally.

The surging currency also reflects US dollar weakness against all major currencies. The US dollar has posted losses over the past five years against all but one of the 16 major currencies on concern about the nation's budget and trade imbalances, and a housing slump.

So far, growing demand for commodities and other industrial goods produced in Canada is more than offsetting the slump in manufacturing. Canada has generated 32 consecutive quarters of current account surpluses, with receipts from outside Canada exceeding payments sent abroad by C$187 billion ($187 billion) over the period. The jobless rate remains at a 33-year low of 6 percent.

The country is also lessening its dependence on the slowing US economy, with US shipments accounting for 76 percent of exports in July, down from 85 percent in 2002. Exports to the US fell 3.3 percent in July, yet were up 29 percent to the European Union and 65 percent to China.

And while the US Federal Reserve cut interest rates on Sept. 18 to revive growth, Canada's central bank raised rates in July and may increase them again this year to stem inflation, futures contracts show.

jcurrieii

What, are we back in the 60's when the U$ was 1.2 or so to the C$?

This is NOT a record high.

EDIT:
As to why the C$ is so high, the US economy is circling the bowl right now, and ours isn't.

HAPA CHIC

this is not the first time the canadian dollar is higher than the US .ONce it was higher....in the 70's !

CanTexan has given the best answr in detail so no need for me to do it

John W

We still have lots of oil. More in reserves and yet to be discovered. By the way! Oil is going up in price, again.

tuppenybitz

guess the mighty US dollar isnt so mighty right now

joe s

One - oil.

Canada has it, and the US needs and it's going at $80+ a gallon.

Two- the Fed.

The US economy is slowing (and possibly in a recession) and cut rates, no other major central cut the rates in lock step.

xxkaztizzlexx

the USA is reaching a recession, just watch.

Penguin_Bob

Interesting question. It seems that the Canadian economy is on a roll and the US economy is slowing down. It has a lot to do with political problems in the US, recent problems in the US housing and real estate market, etc. I doubt than any of us will ever really understand that level of finance and commerce.

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