Cdn. Dollar Jumps To Highest-Ever Level
Posted November 2, 2007 12:00 pm.
This article is more than 5 years old.
The value of the Canadian dollar jumped by more than two full cents Friday, reaching its highest levels in history when compared with the U.S. greenback.
At one point the loonie reached 107.18 cents US, following word of strong employment rates in this country. According to Statistics Canada the healthy Canadian economy led to the creation of 63,000 new jobs in October, dropping the unemployment rate to 5.8 per cent. That’s down 0.1 per cent from the September numbers.
It’s the second month in a row that the jobless rate has been below six per cent, which represents a 33-year low. All of which was good enough to let the loonie hit a new record when the markets closed at the end of the work week: 107.04 cents US.
As the dollar continues to surge, Canadian businesses are finding themselves under pressure to sell goods at the lower American prices. Wal-Mart and Indigo announced Thursday they’d be selling certain items at the American price, while Chrysler Canada said it would provide incentives to help keep business north of the border. Sears Canada and Pharma Plus on Friday announced they were following suit, reducing prices on items like books and magazines.
Canadians have been flocking to the U.S. in droves to take advantage of the strong dollar with some cross-border shopping. The previous high set by the loonie was back in 1957, when it hit 106.1 cents US.
Not all the news was good, however. Manufacturing has suffered with the strong Canadian dollar and that resulted in the loss of 3,500 jobs in that sector in October. The goods producing side also faltered, losing 3,300 positions. Stiff foreign competition is being blamed for the losses there.
“These types of moves cannot go on forever without having serious, serious ramifications to the Canadian economy,” warns Wolfgang Klein of RBC Dominion Securities. Some experts suggest we’re just seeing the start of the fiscal flight. They’re looking at the potential for a 110 cents US buck – and maybe sooner than anyone expected.
The temptation may be to get in the car and drive across the border for deals, but you might be paying more for a fill-up when you do. Fears over oil supplies in the U.S. drove the price of crude up earlier this week, meaning gas prices could soon be at or above the dollar-a-litre mark.