MSNBC is reporting that the Canadian dollar hit a 30-year high against the US Dollar (94.22 Canadian cents per 1 USD), up from its all time low of 61.79 to 1 in 2002:
"The CIBC report cites an expected rise in Canadian interest rates and stronger-than-expected economic growth, along with hot commodity prices and an 'avalanche' of corporate takeovers that require foreign acquirers to deal in Canadian dollars.
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"Meanwhile, the U.S. Federal Reserve looks set to cut rates late in the year, reducing the attractiveness of the American dollar, Rubin said.
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"Equipped with increased purchasing power, Canadians are shopping for everything from cars to furniture and electronics, both at home and across the border. Their freer spending boosted retail sales by 1.9 percent in March, a Statistics Canada report showed. Travel by Canadians in the U.S. and internationally has also risen.
"While this increase in living standards may seem attractive, not everyone is happily throwing back vacation-resort margaritas with news of Canada’s rising dollar.
"Canada’s manufacturing sector used to enjoy that the struggling currency made their goods less expensive in the U.S. and internationally. Now their return on investment is lower due to a less favorable currency conversion, and analysts predict some manufacturers could eventually be priced out of global markets."
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