Just a few months before the rush of the Christmas shopping season, the Canadian currency has fallen. With our dollar being so high over the last year there have been a number of people taking more frequent trips to the States, if even just to go shopping and take advantage of the increased value of our dollar. Unfortunately, reports out in early September 2008 show that the Canadian dollar has fallen and the US dollar has strengthened.
The government report showed an increase in the price of natural gas while the price of crude oil has dropped. Currently the US dollar is gaining strength which is causing the Canadian dollar to lose its strength. The US has a large export of gas and Canada of crude oil-the two countries are essentially competing for the strength of their dollar.
The Canadian dollar weakened to 0.2 percent to $1.0690 Canadian on September 3, 2008. One Canadian dollar buys about $0.94 cents American. On Tuesday September 2, 2008 the Canadian dollar was at its lower in more than a year. This is due mainly to the large declined in oil prices. Oil prices dropped more than $7 per barrel which reflects directly on the Canadian economy. Canada is currently the leading exporter of oil.
Canadian bond prices are also lower but the bonds that were mostly affected were those that are longer dated. In early September 2008 two year bonds were down about 2 cents and the ten year bond was down 23 cents. Even more affected was the 30 year bond which is down 48 cents.
With Canada being in the world’ eighth largest economy, it is being predicted that our economy will slow. This is mainly due to the rising gas prices and consumers no longer being willing or able to spend as much money as they previously were.
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