Canadian dollar flirts with parity this week

It’s pretty cool that the Canadian dollar reached parity with the US during trading this past week, because I wasn’t even born back in 1976, the last time we were there. To say there’s been a sudden upsurge in Canadian flag-waving is an understatement, but the increase is due to the greenback’s weakening, as the Post points out.

Over the past five years, the United States has been struggling with declining economic conditions, including crippling deficits, that have pummelled the greenback against a large number of major currencies. It did not help, either, that U.S. interest rates have been lower than most of the rest of the world, making the currency less appealing to investors who want yield.

All this results in weakened demand for Canadian exports, which puts a lot of pressure on Canadian manufacturers that depend on business with the US. The “declining economic conditions” mentioned above are also going to drive down demand from Americans for Canadian goods, so businesses here would do well to continue diversifying their customer base in other markets.

As for me, I’m going shopping in Buffalo.