It seems like yesterday when the Canadian Dollar was at par with the US Dollar. It took less than 2 years for the exchange rate to equalize again. But what does this mean for the Canadian economy?
Generally, the lower the value of the Canadian dollar, the more Canada was trading. When the dollar was at par in July 2008 it reflected a weakening economy in Canada. But is that still the case? More than ever Canada's economy is strong in comparison to markets with which we are trading.
In terms of trade a strong dollar weakens Canada's selling points, but could a strong economy within Canada compensate for a loss in trade? We already have a booming real estate market and interest rates haven't been lower in years. Perhaps the way Canada will benefit is through an increase in foreign investment for future gains.
I suppose only time will tell.
What are your thoughts?