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rfmcdonaldThis Reuters report on the recent fluctuations of the Canadian dollar vis-à-vis the American is essentially correct.
This relatively high dollar has caused some concern among retailers, perhaps especially small and medium enterprise owners, as the Canadian Federation of Independent Business argues.
This concern likely stems from the fact that, as recent reported in the Financial Post, the high Canadian dollar has been encouraging same-day car travel--and, perhaps, shopping--inside the United States.
A December that's a substantial loss for retailers is going to make fiscal year 2008 rather nasty.
The Canadian dollar ended little changed on Tuesday, rebounding from early-session losses despite tamer than expected November inflation.
Bond prices edged higher on the inflation data, which raised expectations of further Bank of Canada interest rate cuts.
The Canadian dollar finished at C$1.0055 to the U.S. dollar, or 99.45 U.S. cents, up slightly from C$1.0057 to the U.S. dollar, or 99.43 U.S. cents, at Monday's close.
The currency eased overnight and fell further immediately after the data, but then rebounded after bottoming out at C$1.0145, or 98.57 U.S. cents.
"It's still buy the Canadian dollar on dips," said David Watt, senior currency strategist at RBC Capital Markets.
"So we had that move that we saw after the CPI number get completely washed out, and most of the overnight selling of the Canadian dollar washed out as well."
The Canadian dollar hit its modern-day high of US$1.1039 on Nov. 7, but has since fallen back below parity as the Bank of Canada has cut interest rates and left the door open for further easing. Meanwhile, metals prices have also eased, eroding interest in Canada's relatively large resource sector.
This relatively high dollar has caused some concern among retailers, perhaps especially small and medium enterprise owners, as the Canadian Federation of Independent Business argues.
For first time since the Canadian dollar started its long rise, SME owners are displaying strong opinions. In previous surveys, preferences for a lower dollar had only slightly out measured preferences for a continued rise. With the Canadian dollar hitting the US$1.10 mark in November, before settling to near parity, fully 38 per cent of respondents would like to see the dollar fall further, while 17 per cent would like to see a higher value.
This concern likely stems from the fact that, as recent reported in the Financial Post, the high Canadian dollar has been encouraging same-day car travel--and, perhaps, shopping--inside the United States.
Same-day car travel by Canadians to the United States reached its highest level in almost seven years in October, coinciding with the Canadian dollar's run above parity with its U.S counterpart.
But while Canadians took advantage of the suddenly attractive retail prices south of the border, Americans stayed put, as same-day car travel by U.S. residents to Canada sunk to a record low.
Canadians took about 2.2-million same-day car trips to the United States in October, up 6.0% from September. That marked the highest monthly total since January, 2001. Overnight car trips to the United States rose 4.9% to 972,000, the highest monthly level since September, 1993.
By region, about 431,000 Canadians on same-day car trips to the U.S. returned through British Columbia, a 16.5% rise compared with September. That was the largest increase of any province.
In Ontario, same-day car travel south of the border rose only 1.8%. But that modest growth masked the high volume at Ontario border crossings, where the 1.2-million same-day car travellers represented 54.6% of the country's total in October.
A December that's a substantial loss for retailers is going to make fiscal year 2008 rather nasty.
