Thursday, October 23, 2008

Loonie Dives, then Climbs Back




The Canadian dollar dove another cent on Thursday. This hit a four-year low of 78.48 cents U.S. It then recovered to 79.57 cents on news that the Canadian government will temporarily guarantee inter-bank borrowing. The currency went down about 24% year-over-year, early Thursday and down almost 7% from the end of last week, bringing up the rising value of the U.S. dollar relative to other currencies. The Canadian Imperial Bank of Commerce noted that the U.S. dollar continues to dominate the world. Like many other currencies the Loonie has been sinking, with the crisis of a potential recession. In addition to the Canadian dollars depreciation there may be a pay cut by raising the price of imports.

I don't think that the fall of the Loonie effects my life personally however I know that it will effect many people around me such as my parents. At the same time however I believe this may be good for economy, because much of our economy is based on manufacturing companies selling to the United States as well as internationally, this means we will be getting more than when the dollar was 110.3 cents, its all time high. Overall, I believe this is good for Canada, although many believe it may not seem so.





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