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chris gow...

January 04, 2009 09:20 PM

Why has the Canadian dollar fallen against the USD?

A few months ago, in the fall of 2008, the Canadian and US dollars were at par. Now the Canadian dollar is down to $0.82 USD.

Why?

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jeffhoard

January 04, 2009 09:54 PM

The Dollar was only strong for only a short period of time when you look at our recent history, in 2007/2008 it was at a 30 year high.
http://www.flickr.com/photos/33749589@N07/3167547283/

Several things caused the dollar to fall and one could argue the "global economic crisis" is part to blame, Canada has a commodity based economy and if nobody has money to buy our resources we get lose out, also the price of Oil has fallen dramatically.

http://www.flickr.com/photos/33749589@N07/3167563029/

Source(s):
http://www.economicnews.ca/cepnews/wire/article/196225
http://www.economicshelp.org/blog/economics/why-is-canadian-dollar-falling/
http://www.cbc.ca/money/story/2007/05/18/dollar.html
http://www.cbc.ca/news/interactives/map-history-dollar/

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reiver

January 05, 2009 11:04 AM

One thing to note is that when the US Economy does bad, everyone else's economy tends to do worse.

This is due to the US Dollar being used as the reserve currency for most the rest of the world. http://en.wikipedia.org/wiki/Reserve_currency

(Having Gold, Silver, or some other precious metal, as the Reserve [rather than US Dollars] would be much much IMO. But that's getting off topic.)

And while that note doesn't fully explain why the Canadian Dollar has fallen relative to the US Dollar, it is something to keep in mind.

If you really want to see if the Canadian Dollar has lost value or not, check it against the price of Gold.

The Canadian Dollar may have not lost value... it might have stayed about the same... and the US Dollar may have gained value... which, by taking a quick look at the "USD vs Gold" graph and the "CAD vs Gold" graph, seems like the case.
-------------------------
USD vs Gold graph: http://www.lewrockwell.com/blumert/burt-gold.html
CAD vs Gold graph: http://freemarkets.ca/gold

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