If you’ve been pricing a holiday in the sun this winter, you know that the Canadian dollar is falling again. The last couple weeks have been tough on the Canuck Buck as it hovers around its low for the past 52 weeks.
A lower valued currency hits us in a variety of ways: some good, some not so much.
Those on the good news side of the equation tend to be exporters. Our goods become more attractive in global markets that are usually denominated in American dollars so it costs foreigners less to buy our stuff. And we get paid in US currency which converts into more Canadian dollars.
One the not-so-good side, imports cost more. That includes buying things denominated in US dollars which often includes – either directly or indirectly – travel products such as sun vacations or fresh fruit and vegetables.
And why is this happening? Global interest rates have been on the rise. The Americans raised theirs this month to fight inflation. So did others but we did not, putting downward pressure on our currency and pushing up prices.
