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Thread: cad vs usd

  1. #1
    God/dess Corgan's Avatar
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    Default cad vs usd

    I noticed that as of right now, $1 cad = $0.780336 usd.

    i would love for it to stay that way, so that my hotel will be much cheaper! i'm going in early January, will the dollar hold still or go lower? or is this just something that's happenning this week? figuratively speaking.

  2. #2
    Banned Melonie's Avatar
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    Default Re: cad vs usd

    the Canadian dollar was actually above 1:1 with the US dollar while oil prices were near their peak. Now that oil prices have declined, the Canadian dollar (along with the Aussie dollar, the Ruble, and other natural resource economy countries) have weakened in comparison to the US dollar. The future of these currencies relative to the US dollar (in the short term) is basically tied to future demand / price levels for oil and other natural resources upon which the vast majority of these domestic economies depend. In the longer term, the future of these currencies relative to the US dollar will probably be tied to the US gov'ts credit rating i.e. whether or not the Europeans, Japanese, Chinese etc. lose confidence in America's willingness / ability to continue paying back the money that they have already loaned to America, and America's probable need to borrow even more money from foreign lenders after Obama takes office and US gov't spending increases by a 'promised' $800 billion or so.

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    Senior Member Butrcup98's Avatar
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    Default Re: cad vs usd

    Melonie, I was curious if you know why gas prices have been cut in half. Right now, in Louisiana, I paid $1.99 p/g last night. We haven't seen prices that low since 2005.

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    Banned Melonie's Avatar
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    Default Re: cad vs usd

    ^^^ several reasons ...

    A. the 'purchasing power' of the US dollar ( a.k.a. US Dollar Index, a.k.a. US Dollar foreign exchange rate) has recently increased by some 25% or so, which automatically lowered the US dollar denominated price of world commodities such as oil and food by a similar 25% ( although other countries using other currencies didn't necessarily see this price change i.e. the Canadian dollar denominated price of oil and food has basically been unchanged)

    B. major declines in economic activity have vastly reduced the amount of gasoline and diesel fuel being consumed for business transportation, plus major declines in US disposable incomes has incrementally reduced the amount of gasoline consumption for non-essential travel. This drop in consumption occurred much more quickly than any drop in supply (i.e. the Saudies and Kuwaitis kept pumping and shipping crude oil at nearly the same rate), meaning that oil tanks around the world started being filled to the brim.

    C. hedge funds and commodity speculators have been forced to sell off many of their holdings in order to cover redemption requests (i.e. 'anonymous' investors wanting to cash out their investments). Some of these holdings were in oil futures. Thus as these futures contracts now come due, the actual oil behind them is now being put into storage or dumped onto the commodity spot markets at whatever price that actual spot market consumers of oil are willing to pay.

    D. most US taxes on gasoline are percentage based, thus if wholesale gasoline has fallen in price from $2.50 per gallon to $1.25 these taxes also fall from (in NY) $.80 per gallon to $.40

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