Collapse of the Canadian Dollar ?

I was looking for an "Economy" Forum, but I didn`t see one.

Sorry if this thread is not a the right place.

My question is this :

For a while now our Canadian Dollar has been to parity with the U.S. Dollar.

If, for instance, the U.S. economy, The Markets, China, and what have you causes the USD to Crash Big Time, would that mean that my Canadian Loonie would stay to parity and Crash also within a few hours, days, months, or it would not be too much affected.

Any thoughts welcome.



Grinder

Canada will be less affected due to the amount of resources, in my opinion.

Gasoline price is high here ($1.48 per litre) and so is heating oil. But all the rest isn't too bad.

Hmmm, this bring one thing to mind..... AMERO currency?
I am sure this is coming soon, perhaps after US attacks Iran? I wouldn't doubt it!

Cheers!

Yeah, me too, the famous Amero, Iran, Israel, and all of what is going on...

Too bad we don`t wave an Insider from A.T.S. to attend the Builderberg meetings to give us scoops

Seeing as the Loon only has a rate just about parity because the value of the USD has fallen so much in the last year or so, I don't see how they're really all that linked. Two different currencies, two different central banks and two different countries.

Originally posted by jBrereton

Seeing as the Loon only has a rate just about parity because the value of the USD has fallen so much in the last year or so, I don't see how they're really all that linked

. Two different currencies, two different central banks and two different countries.

That is my question, if the USD has fallen so much lately, why Isn`t the Loonie going higher compared to it. Why is it still parity ?

There are many factors that affect the C$ v. the USD. Interest rate spreads, commodity prices and the shape of our public finances, to name a few.

IMO we certainly have the last two going for us, but the first one has tempered any further advances over the past few months - the weakness in the Ontario manufacturing sector has put downward pressure on our interest rates, thus making the C$ less attractive. That said, some Cdn houses are predicting we'll go to $1.05USD over the next few months.

While I am in no way an authority in this subject, I would like to point out that during the initial slump of the US dollar the Loonie had almost surpassed the 1.15$ mark. I remember reading at least two articles in which it was stated that this was hurting Canadian corporations greatly and efforts would be organized to suppress the loonie ascension. Shortly thereafter and until now the Loonie is always +- .03$ compared to the USD.

Actually Canada has been lowering there prim lending rate with each dip the USD takes , so that the Canadian dollar stays close to par with the USD .
As mentioned earlier Canada's natural resources and low debt make it a much more likable investment then the USD right now .

reply to post by Ceara


Agreed

The Canadian economy has been and will continue to ride the resources boom for at least the next five years, much like the Australian economy and the Russian economy...

Sure there will be a slow down in economic growth as a result of the problems in the US & Europe, but the resource based economies will be largely shielded from the effects of same...

Peace

EDIT -- for words i missed out the first time...

[edit on 30-6-2008 by Rilence]

[edit on 30-6-2008 by Rilence]

Well in all actuality, a collapse of the US dollar would mean a tragic stumble for the Canadian loony. Our main export is to the United States. We export 81.6% to the US, and import 54.0%. If we can't export as much to the US many of us would lose jobs because companies must shut down, we would lose tourists from the US, and our food prices would inflate dramatically. However, I think the majority of our export to the US is oil. I am sure that we can find another partner such as China or India to trade with.

reply to post by Equinox99


Definitely Equinox...

Canada needs to disengage itself from the US economy as much is possible as soon as possible...

I mean its nice to have the old dog around, but when he's got cataracts in both eyes, is deaf, has arthritis in the spine and diabetes, you have to put him down eventually, right ?

I'm sure China would love to get its hands on some (more ?) Canadian resources....They cant get enough....Australian iron ore producers have just secured 95% increases in or prices for the next 12 mths, that's how insatiable the Chinese are...

Peace