Over a period of less than five months, the Canadian dollar appreciated by 20% against the U.S. currency - as analysts noted BMO Capital Market, it is the most rapid growth in the history of observations. The consolidation had a negative impact not only on industrial and tourism industry but also threatens the retail business in Canada. As the Canadian dollar is moving towards parity against the U.S. dollar, the comparison between the two countries has become one of the favorite occupations of Canadians. Canadian retailers could face another wave of flight of the buyer to a neighboring country, despite the fact that the (estimated Bank) consumer basket in Canada by only 7% more expensive (given the current interest rate) than in the United States, compared with 18% in June 2008.
1 comment:
Interesting. The inflation in the US seems to be much higher than the inflation in Canada. That would explain the decreasing difference in prices of consumer baskets in spite of the strong Canadian dollar. As for its strength, there are even predictions claiming it will slow down the recovery from recession quite significantly. However, it's very fluctuating thus it's highly unlikely that this strenght will last for a long period. Regards, Jay.
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