"Canadians cheered Friday for their beloved loonie, reaching parity this week with the US greenback for the first time in 31 years, but consumers are not yet benefiting, and manufacturers are reeling."
Kind of makes me wonder what the hell they are celebrating, the exchange rate is leading to inflation for Canadian consumers and depressed export conditions for Canadian manufacturers, which like in Europe, are beginning to see this play out on the jobs front.
The irony is that the recent credit crunch led to a strengthening of the dollar, but the credit crunch caused the Fed to cut rates 50 basis points which then hammered the dollar. I’m not smart enough to appreciate the complete dynamic of currency movements, but I do like the fact that the Bush administration departed from previous administrations by not maintaining a floor for the Dollar. The reason why I like this is that it has helped U.S. manufacturers export more goods, and I am also not prone to nationalism about the dollar. To me, currency is nothing to get prideful about.
BTW, we were at Bloomingdale’s in SF on Friday before meeting friends for dinner and I was struck by how many Europeans were here, so if the Euro’s high exchange rate against the Dollar is bringing more tourists here, then that’s just one more thing to like about it.