Time to exchange your $US into $Can...
 

Not good for canadian webmasters... it wont get better...

http://ca.today.reuters.com/news/new...archived=False

NEW YORK (Reuters) - It might have been unthinkable only a few years ago, but parity between the U.S. and Canadian dollars some day is not that much of a long shot any more.

Even though the Canadian dollar has appreciated by almost 50 percent against the greenback over the last three years, analysts say buoyant global commodity prices, Canada's relatively favorable economic fundamentals and prospects of rising interest rates suggest there's room for even more upside.

Further gains of only around 15 percent from current levels would put the U.S. dollar at C$1.00 for the first time ever.

"We will get there," said David Durrant, chief strategist at Julius Baer Investment Management, LLC, in New York.

"We would think that's in the cards. Will it be in six, 12, 18 or 24 months? The timeframe's all that's missing ... (but) that's where we're going," he said.

The U.S. dollar fell to a 14-year low of C$1.1367 <CAD=> at the end of January. On Thursday, it was trading around C$1.1450, while the Canadian dollar rose to its highest level against sterling <GBPCAD=> in 12 years.

Durrant estimates that in real terms, on a purchasing power parity basis, the U.S. dollar was probably worth approximately C$1.00 around the time its nominal exchange rate traded at the record low of C$1.12 in December 1991.

Durrant reckons Canada's terms of trade, with oil, metals and commodity prices still strong -- this week's sell-off in these asset classes notwithstanding -- will continue to provide a pillar of support for the "loonie."

If global growth remains buoyant, demand for commodities -- and therefore the loonie -- should also remain firm.

"If you're bullish on the global economy over the next couple of years, you have to think the CAD is going to be a major beneficiary," said Peter Frank, senior currency strategist at ABN Amro in Chicago.

RATE SPREADS TO NARROW?


Frank predicts parity between the U.S. and Canadian currencies by the fourth quarter of next year and targets the greenback at C$0.95 by the end of 2007.
"I've had that forecast for a long time and I still think it's reasonable. It's probably going to happen," Frank said.

Traders have been betting consistently on further Canadian dollar strength for several months now. But that positioning has not limited the currency's gains so far, and in any case, it is not thought to be at levels extreme enough to prompt an unwinding.

Canada is a major commodities and energy exporter. The high revenues it has received recently have helped swell the country's trade and current account surpluses.

The latest available data show Canada's merchandise trade surplus in the first 11 months of last year was C$59.33 billion. Figures for December, due on Friday, expected to show a surplus of C$6.8 billion.

Canada's budget surplus in the first half of fiscal year 2006, from April to October, was C$9.45 billion, although C$5.3 billion of proposed tax cuts for 2005/06 have yet to come into effect.

Canada's currency does not need to attract large amounts of foreign capital to fund "twin" trade and budget shortfalls and prevent it from depreciating, like the dollar does.

Indeed, Canada's broader economic health, reflected in the country's low and falling unemployment, suggests there is scope for the Bank of Canada to continue raising interest rates.

"The narrowing of the interest rate differential will deflect short-term money that would otherwise flow out of Canada to the U.S.," said Michael Woolfolk, senior currency strategist at The Bank of New York.

Benchmark rates currently stand at 3.5 percent, a full percentage point below those in the United States. The Federal Reserve is expected to stop raising rates around the middle of the year, but most analysts expect the BOC to continue through the end of the year.

This anticipated narrowing of rates and yield spreads -- 2-year spreads are currently around 65 basis points compared with 95 basis points six months ago -- may lend further support to the Canadian currency in the coming quarters.

Woolfolk's forecast is for the greenback to fall to C$1.05 by the middle of 2007. But he wouldn't be surprised if parity is reached before the year's out.

"This is not over yet and Canadian corporates need to start adjusting to that reality," Woolfolk said.

Good news for Canada.

Bad news for Canadian webmasters :(

Along with everyone else here north of the border, our company has really taken a shitkicking in the exchange in the past while.

Soon it'll be time to replace USD with CDN on our join pages.

The US and Canadian dollars have been at par several times - the last time was in the middle '70's.

what a friggen nightmare omg

It'll be Euros before cdn $.

Anyone know of USD banking options ? RSP friendly for Canadians?

Sigh.... :(

It was a good run while it lasted :Oh crap

Bush better get his act together and get that US dollar back up where it belongs.

I lost 50 % on my exchange since I started webmastering. That's sad

I just did a forex yesterday for payroll and quarterly taxes, it wasn't pretty.
WG

FUCK!!!

sorry had to vent

Bush wants the dollar just where it is. Increasing the export market is key.

he's is too busy "saving" the world from "terrorists":disgust

Fucking Bush is ruining the US and putting us in a hole that will take a decade to get out of and that's only if everything goes well:(

Makes me sad, everytime I think about it

currencies are fun to play around with
I had my dollars in an account I never touched up until the euro was at 1.16 from its highs at 1.36
I sold and now its at 1.20 again
not only I increased my whole cash by 4%, I also saved 20% by not having my checks and wires changed to euros right away.

Why are you keeping all your money in U.S.$???

Won't that be fun?

If Bush would keep our money to ourselves, this situation wouldn't be happening. It's kinda funny how he'll send 500 BILLION DOLLARS to Iraq while school funding along with everything else is getting cut everywhere in the States. They could've taken that money and given each of the 50 states $10 billion dollars and I could bet that'd spark a whole lot of things.

You said it.

Because 95% of my expenses are incurred from US based companies. I just need CDN $ for payroll and taxes.
WG

Priorities.......................................k ind of fucked are'nt they :(

Your best bet is to BUY GOLD --- and hold.

WHOOP! :thumbsup \\

$400 - 4 page tour plus members area template - 1-800-488-2570

for those who dont understand the basics of macro economics yet have an opinion anyway (i.e. "Bush is an asshole, so please accept my safe, yet meaningless remark")

a "strong dollar" does not mean all is perfect in the world. a "weak dollar" does not mean everything is going to hell either. not too long ago, we were in a recession and a weak dollar was instrumental in pulling through it and getting back on track

-------

Strengthening Dollar
Advantages

* Consumer sees lower prices on foreign products/services.
* Lower prices on foreign products/services help keep inflation low.
* U.S. consumers benefit when they travel to foreign countries.
* U.S. investors can purchase foreign stocks/bonds at "lower" prices.

Disadvantages

* U.S. firms find it harder to compete in foreign markets.
* U.S. firms must compete with lower priced foreign goods.
* Foreign tourists find it more expensive to visit U.S.
* More difficult for foreign investors to provide capital to U.S. in times of heavy U.S. borrowing.

Weakening Dollar
Advantages

* U.S. firms find it easier to sell goods in foreign markets.
* U.S. firms find less competitive pressure to keep prices low.
* More foreign tourists can afford to visit the U.S.
* U.S. capital markets become more attractive to foreign investors.

Disadvantages

* Consumers face higher prices on foreign products/services.
* Higher prices on foreign products contribute to higher cost-of-living.
* U.S. consumers find traveling abroad more costly.
* Harder for U.S. firms and investors to expand into foreign markets.