The canadian loonie just keeps gaining and gaining, up a modest 5.5% percent in 2010, from the gross 16% gain against the USD in 2009. This growth is in direct correlation with Canada's vast supply of natural resources and rising prices for crude oil and commodities. Canada and the US are major trading partners and the associated power of either currency cannot be overstated as the latter imports more oil from Canada than any other country.
Export:
The higher loonie is a burden for Canadian exporter's as it seems too expensive for company's looking to import. Thankfully with the current prices the demand for gas from the US is continous and dependable so there has not been a major negative impact on oil exports. On average 1,962,000 barrels per day in the first 10 months of 2010 were exported compared to 1,919,000 in 2009 during the same time frame.
Import:
Canadian companies that import raw materials, machinery and other American products benefit from the energetic loonie. Retailers in US imports have a multitude of options in lowering prices and increasing sales volume, or maintaining prices and increasing margins. This also works in reverse for American importers because they pay more for Canadian products.The stronger loonie is music to the ears for many American exporters who have had a tough go if it with the recession the last few years.
The stronger loonie provides canadian businesses that want to expand into the US more purchasing power as they're money now stretches farther than before in regards to investments. The sypnosis is that the key to a strengthened loonie is a stable and growing canadian economy and higher commodity prices that should hold in the future.
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