A currency war is raging around the world as central banks attempt to keep their country’s exports competitive by letting the value of their nation’s money collapse.The Canadian dollar (a.k.a the loonie) is one of the few exceptions and is rising in value almost daily against the falling U.S. dollar.
So where is the loonie, which just a few years ago was trading at US$0.62, headed in a world where most of its competitors seem determined to devalue their currencies?
Many leading analysts believe the dollar is actually at a crossroads that could see it shoot has high as US$1.20 over the next year.
On the one side, demand for Canadian exports like oil, copper and potash are rebounding.
And with Canada’s national finances and banking system in great shape compared to many countries, the loonie is increasingly in demand as a safe-haven currency. (more)
At the moment the opposite is happening but I have a thread on my forums with this exact same title.
ReplyDeleteI'm not sure if this will happen unless our economy becomes less dependent on the US (eg. if we did more trade with Asia, Middle East and Latin America).
I guess only time will tell, there are so many political and economic factors in play, and the EU crisis supposedly has people propping up the US dollar as a safe haven from the Euro.