Better Value in Dollar

Did you notice that one Canadian Dollar can exchanged for nearly 0.98 US$ in the last few day?

Well some people did.  And the idea of cross border shopping jumped immediately to their mind.

I had two email in the last two days inviting me to two interviews.  One with CBC Winnipeg, and the with The Global and Mail.

Being a self-appointed expert (well I learnt it by mistakes), I gladly accepted both invitations.   In the pre-interview, the CBC Winnipeg producer asked me when I started cross-border shopping.  My answer, “since there was a border.”

The CBC Winnipeg interview was broadcasted live at Oct. 14^th 6:10pm EDT.  I have a recording here, if you’re interested (CBC-Winnipeg-Interview).  And the Global and Mail interview was yesterday, with a promise to publish on next Monday’s paper (Oct. 19^th) or the PDF: How to score a cross-border shopping deal.  Have a good reading, if you grab a copy.  It’s full of tips on cross-border shopping that you can read on this website.

I’m glad that our loonie is close to par again with US dollar, like I predicted in early June. But I didn’t expect it to return so soon.

Let’s put aside the debate of why Canadian prices are so high (be it price gauging or scale of economy). By all means, take advantage of the strong Canadian dollar, and Happy Cross-border shopping.

To every Canadian shoppers, the exchange rate of Canadian over US dollar is always on our mind.  After hitting the record high over 1.08 (CA$/US$) in Nov. 2007, Canadian dollars had been trending downwards.

When CA$ was at the lowest point in Feb. 2009 was 0.78, it felt like the miserable old days in the last twenty years.

Now the million dollar question is “Will Canadian dollar appreciate to par with US$ again?”.

Given our limited population (30M vs. 300M in US) and limited dominance in hi-tech (considering the failure of Nortel), the most valuable thing in Canada is our natural resources.  Canadian dollar will be moving in tandem with natural resource prices.

When the recession is fading away, natural resource prices will move up and so will Canadian dollar . Meanwhile the huge bailout spending by the US government will significantly weaken the value of US dollar. The predication from forecasts.org is that by Oct. our loony will be in the 0.92~0.95 range.

The good time of cross border shopping will be back.