The Canadian dollar — affectionately known as the “loonie” — is dropping in value.
At the close of currency trading Monday, the Canadian dollar hit its lowest point in nearly two years in comparison to the U.S. dollar. If the trend continues, it’ll be cause for concern in border states.
Less than two months ago it was at parity with the greenback. Now it’s worth around 95 cents U.S. This is actually good news for Canadian exporters because their products become cheaper for American buyers. It’s a more worrisome development for retailers and hospitality companies on this side of the border.
“I think up to about five cents (depreciation) really doesn’t make much difference,” says Don Alper, who directs the Center for Canadian-American Studies at Western Washington University. “But I think if it gets much beyond that, then we might start to see some reduction in volumes of Canadian shoppers coming across the border.”
Alper says he has not seen any effect on cross border travel yet, an observation confirmed by traffic counts from U.S. Customs and Border Protection. According to analysts, the U.S. dollar is strengthening against other currencies based primarily on signs our economy is finding solid footing.
On the Web:
Historical Rates for the Canadian Dollar - Federal Reserve