What is going on with our LOONIE? This can't be good can it?

Question

Wow, every day you read the loonie has gone up again and again. I was reading yesterday that this is soon going to be bad for our economy if it keeps going that way. I kind of get why but is there someone out there than can explain it a little better?

Also I don't think all this rushing over the border is going to help our economy any either, and yet it's not fair how ridiculously high our prices are compared to south of the border. This is a big deal and I don't think it's good that it rises too much higher.

Since America is a lot of our business does this mean our products will cost more to them and therefore we will take a hit too? Or does it simply mean others from around the world want our products and resources etc. and can we keep up with the demand? Will this mean more jobs for us too?

Answer 1

It all sounds a little Loonie, to me.....LMAO...sorry, I had to go there...

Answer 2

America is Canada's biggest trading partner.

So, when our dollar (US) loses value against your Loonie, your goods cost us more AND it costs us more to travel to Canada.

Don't know what part of Canada you live in, but Ontario has been sliding into a recession, just like the US. So much of Ontario, and many US state's economies are tied up in manufacturing (not just cars, but factories of many kinds) and over the past 5 years millions of our jobs on both sides of the border have gone to China and other Asian nations. Canada protects its workers better than the US, so your effects have taken longer to show, but now it is becoming apparent.

Hope that helps your understanding, drop me a line if you want any other info.

Peace my north of the border friend.

Answer 3

Our dollar is known as petro dollar as we are an oil exporting nation and hence, is tied to the high cost of oil. Also, the economy is booming, unemployment is the lowest in over 30 years, the Government runs a surplus each year (only one in the G8 to do so) and so, international investors see Canada as a good place to put their money rather than the U.S.This morning it is $1.10 and hence some action from the Government to curb its going higher may be taken. The higher the value, the more costly our exports.