Good News For The Loonie?
Our beloved loonie is on a tear:
The loonie ended the day up US 1.90¢ at US 91.60¢ after touching a high of US 91.75¢. It is at its highest level in seven months, having jumped more than 7¢ in May — its biggest monthly gain since 1950, according to Bloomberg News.
The US greenback fell more than 6% in May against a basket of six major currencies, its largest monthly drop since 1985.
You’d think there might be some good news for Canadian consumers…
Oil is priced in US dollars: So goes the explanation for our gas prices being stuck at $1/litre after oil fell from $140 to $40. Now that oil is at $65, the strong loonie should mean less of a increase. And I’ll like to sell you the Lions Gate Bridge.
Foreign import prices will fall – just like last time.
Travel to the US just got more affordable. I’d suggest Texas. California is about to get a lot more expensive.
Imported Car prices will fall. A BMW 528i is $36,855 in the US – Vancouver it’s only $59,900. Factor in exchange at 85 cents and it’s $50,915 – only a $14,000 rip-off (38%). I know such a capitalist pig vehicle is frowned upon here in Canada, so let’s look at the standard 2009 Honda Civic Sport sedan. Base price: $21,580 CA compared to $12,974 US. Factor in excahnge at 85 cents and it’s only a $5,369 gouge (41%).
Will the rising loonie and commodity prices mean good times again for the Canadian economy? Will our wounded retailers decide to pass along a little of the wealth to Canadian consumers?
Or is the more likely scenario that Obama’s looting will collapse the American dollar and drag ours along with it?
May 31st, 2009 at 2:44 pm
By all means come on down. Texas has wonderful beaches from Galveston to Brownsville. We also have spectacular scenery in Big Bend in west Texas, or Palo Duro Canyon. There are lost pines, big thickets, waterfalls and lakes. You can go to a spa worthy of Gstaad or rough it in zipline access treehouses. And Texans are friendly. Just as long as you don’t try to tell us how much better they do things back home. Come on down.