Dropping Canadian dollar

With the Loonie expected to hit .85 USD this year I wonder what effect it will have on the already dismal real estate scene around here. Will the Canucks be more motivated to purchase a property since rents (which are typically priced in USD) will seem higher or will they be more likely to hold off and see if the dollar recovers next year?

C.B. Why the plunge???? Can't sell all the oil??

Z

we made the decision to buy here in 2000 when our budget of 60k cdn was the equivalent of 90k usd. when we bought 7 1/2 years ago the canbuck was high enough that we came under budget even though the canbuck was .88 per usbuck[peso we got 9.7] . i don't see a problema fer canuckleheads.

Canadian Dollar To Sink To 70 Cents, Hedge Fund Manager Says

 http://www.huffingtonpost.ca/2014/01/29/70-cent-dollar-loonie_n_4688245.html

Pedro wrote:we made the decision to buy here in 2000 when our budget of 60k cdn was the equivalent of 90k usd. when we bought 7 1/2 years ago the canbuck was high enough that we came under budget even though the canbuck was .88 per usbuck[peso we got 9.7] . i don't see a problema fer canuckleheads.

Don't you mean when the 90K Canadian was the equivalent of 60K USD????

CanuckBob wrote:With the Loonie expected to hit .85 USD this year I wonder what effect it will have on the already dismal real estate scene around here. Will the Canucks be more motivated to purchase a property since rents (which are typically priced in USD) will seem higher or will they be more likely to hold off and see if the dollar recovers next year?

I tried to post a link from a column in the Globe and Mail on Friday but couldn't get it to work.

In effect, the author is saying that the loonie, peso, etc. are not really dropping, but rather the USD is rising--and why: as weak as the US economy may be, it seems to be in recovery.  It is still seen as the strongest economy right now and people are dumping other currencies to buy things like US Treasury bills denominated in the USD.

And, Canada (and probably Mexico) aren't fighting it because it makes their exports cheaper in the US as its economy recovers. But a little devaluation is good like a fine wine, but too much can be a disaster. (Not the least is the impact on energy costs since petroleum products are priced in USD. We're already seeing it here [and I think down there] in propane/LPG prices. Gasoline will soon follow.)

Down there, it may be bad news for Canadians relative to things priced in USD's, but not so bad for for things priced in pesos as it will probably fall farther and faster than the CAD. And good news for Americans in Mexico, of course.

My observation is that sometimes money seems like water sloshing around in the bilges of a boat. Not too long ago, it was all heading into the Canadian dollar, before that, the Euro. So who knows where it will go next? Markets always seem more driven by panic than logic--but what do I know?

And, of course, if there is too much water sloshing around in the boat, it can eventually cause it to capsize!

Bob

CanuckBob wrote:

Pedro wrote:we made the decision to buy here in 2000 when our budget of 60k cdn was the equivalent of 90k usd. when we bought 7 1/2 years ago the canbuck was high enough that we came under budget even though the canbuck was .88 per usbuck[peso we got 9.7] . i don't see a problema fer canuckleheads.

Don't you mean when the 90K Canadian was the equivalent of 60K USD????

yer right-i ain't good at math this early in the am or any time fer that matter

Canadians will be more motivated to sell their homes here.

cypress wrote:Canadians will be more motivated to sell their homes here.

betcha we won't.

CanuckBob wrote:With the Loonie expected to hit .85 USD this year I wonder what effect it will have on the already dismal real estate scene around here. Will the Canucks be more motivated to purchase a property since rents (which are typically priced in USD) will seem higher or will they be more likely to hold off and see if the dollar recovers next year?

I'll try again with that article from the Globe and Mail...


http://www.theglobeandmail.com/globe-investor/inside-the-market/bombardier-oversold-but-tsx-not-out-of-the-woods-yet/article16638684/#dashboard/follows/

The link does not allow a non-subscriber to read the article.

http://www.forbes.com/sites/dividendchannel/2014/01/09/bombardier-is-now-oversold-bdrbf/

If the $USD was truly getting stronger it would be seen in the $US/Euro rate.  I think $MXP and $CAD are simply getting weaker.

xe=12.2088p/canbuck today which is fine with me

I read an article this week that talked of the falling Can. $ and they suggested this is only a temporary thing and that it will turn around before too long. The reasoning is that the Can $ is strongly tied to oil and right now the demand for that is down = demand for our $ is also down but when the demand for oil increases so will the $ value.
Another reason given to hold on for awhile is that the US will again be looking to refinance their massive debt and likely will run into problems again like the last time when they had to shut down some government services. When the refinancing and battles with Congress come around again the US $ will once again loose value on the international stage.

Yes, also the CDN dollar is strongly tied to the CDN commodities. China is one of the biggest consumers and with the slowdown in the Chinese economy and gloom and doom on their horizon it hasn't helped any.

The Canadian economy is doing so well, with low inflation, so the Bank of Canada continues to hold interest rates at a low level and that has a big effect on the dollar.
Good news for me is that I do not need US$, only pesos, and that drop has been minimal.    

David wrote:The link does not allow a non-subscriber to read the article.

Sorry. I was afraid of that.

Bob

Nothing goes in one direction forever.  The USA never "refinances" its debt.

No, it just prints more money.........jajaja.

Yup, seems to be working.