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
*Follow Jason on Twitter here.
Posted by: Northern Ontario | Apr 21, 2021 4:26:34 PM
I have opened a US account where I can purchase more $US for my yearly winter trip to a sandy beach. I am not affecting any Canadian employers by doing so. It just means that it will cost me less for my trips which equates to more Canadian $ in my pocket to spend here in Canada. I hope this will equal more jobs with the extra cash I spend.
I am very cognizant of the repercussions of cross-border shopping and the effect on our economy. I won't support the US economy if we have the same access in Canada even though it is more expensive. If Canada had a sandy beach available to me in the Winter, I would stay here.
However, I do not condemn those who do purchase from the US. We all have various beliefs. I understand the true costs of having access to Healthcare and higher wages here compared to the US.
Posted by: Chip | Apr 21, 2021 10:56:59 PM
@ Northern Ontario.... 100% agree with you. I have done the same thing for the past 3 years. Even before the loonie went over the greenback, I would still purchase US cash in small $250-$750. chunks. You'd be surprised how that can add up at the end of the year. Just spent the past 2 months in FLA and will be back again next year... and the year after that. Go Loonie !!
Posted by: Steven | Apr 22, 2021 9:25:18 PM
I'm using the high loonie to increase my energy efficiency as much as possible now. From all the signs the US Debt will be downgraded after the 2012 election, interest rates will go up and the US dollar will fall even faster than it is now. Unless something dramatic changes I should be able to buy the US dollar for $0.75 CDN or less in three + years. That said when either the US Tax increases or debt rating cut goes into place there will be worldwide repercussions and history would dictate that Canada will be affected more than most (that's when saving on energy will really matter). That said, if enough of us buy US dollars now the US won't have to keep turning to China and the loss of the AAA+ rating might not be as big a worry.
What's that saying "Buddy can you spare a dime? Or.... 14 Trillion dollars?"
Posted by: Chip | Apr 25, 2021 7:08:07 AM
Just bought $5,000. US. Cost me about $4.7K Go Loonie !!
Posted by: Daniel Sauve | Apr 26, 2021 11:30:49 AM
I live 14 km from the US border, I buy US money every week and put it in a US account. I buy only north american cars to help out our economy. I mostly buy every thing here in canada. but I travel to the US for my vacations. If we had better stock car tracks and racing here I would stay here for my vacations. But Canadians do not know how to make a good track or to keep good races here.Untill they do I have to head states side for my vacations. some people here go state side to buy every thing from food, gas, parts,cars, just about any thing, but they do not think on helping our economy and they are the first to complane about things going wrong in our country. If theres jobs lost here its there falt and no one else. I work here and spend 90% of my money here. I am a PROUD CANADIAN and will always be.
Posted by: Toronto El Toro | May 4, 2021 11:00:02 AM
The strong Loonie is having a tremendous effect on our real estate industry.
International investors have "flocked" to the strength of our loonie and buying up prime real estate in Central Toronto and Vancouver. Purchasing condos are not new to these international buyers but caution is in the wind as bubbles may be formed. Fortunately our government is taking every step possible to alleviate these pressures. The first time homebuyers are having to compete in this market and are victims to our strong Loonie. Currency preservation along with economic strength in the reason why our petro dollar is having an effect on our real estate market.