How are you capitalizing on the sky-high loonie?
Like we do news of Michael Ignatieff, Charlie Sheen and the PlayBook, most Canadians tune out stories on the rising loonie.
Sure, we care when it reaches and nears parity, but for all the raging headlines about closing at 97 cents or 98 cents or $1.01 – for the most part, that’s for day traders and investors, not John Q. Cornergas.
When it gets this high, however, our heads start to turn. The loonie surged above $1.05 U.S. yesterday for the first time since 2007 (it closed at $1.049) and suddenly we begin to think: what are we doing to capitalize on the high dollar?
The instinct of most Canadians is to run south, and who could blame them?
For all the “Buy Canadian” sentiment, the cries of Canuck retailers generally fall on deaf ears when retail prices aren’t adjusted in line with currency changes, as they’re not being now, the Vancouver Sun reports.
According to BMO Capital Markets, we pay about 20 per cent more than Americans for general retail goods as it is. So we may understand why Canadian store owners can’t drop prices when the loonie soars – many of their goods are ordered months in advance – but that doesn’t mean we’ll spend our money with them.
“They’re certainly not there to play tiddlywinks,” Bruce Cran, president of the Consumers’ Association of Canada, said of the droves of Canadians now hightailing it south of the border to shop.
But cross-border shopping isn’t the only way we can capitalize on a strong loonie. Since the greenback is accepted worldwide, our ability to convert the loonie into U.S. dollars at a favourable rate means our currency now goes further anywhere we’d like to vacation, too.
Same goes for travelling within the States. If you’re a Snowbird or someone that visits the U.S. frequently, you can swap a large chunk of Canadian dollars at a nice rate now, rather than as you need them later – when the exchange rate may not be as encouraging.
And what about banking? Opening a U.S. dollar account is a good way to profit from positive fluctuations in the loonie; presuming, of course, the greenback will come back to strength somewhere down the road.
How are you taking advantage of the sky-high loonie?
By Jason Buckland, MSN Money
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