Canadian Dollar Trading at Parity with U.S Dollar

Canadian Dollar

For the first time since July 2008, the Canadian dollar has traded at parity with the U.S. dollar, and even beyond it today.

The increasing price of crude oil and inevitable raising of interest rates in Canada are cited as the key reasons behind the increase in value of the Canadian dollar.

This is familiar territory as it relates to crude oil, as the last time the Canadian dollar was trading at parity to the U.S. dollar, oil had reached a record high of $147.27 a barrel.

With commodity prices expected to continue to skyrocket, the Canadian dollar should remain strong for years to come against the dollar, and its past behavior will no longer be the norm as it passes into an entirely new era.

This will be great for Canadian consumers who should enjoy lower prices, but a challenge to exporter, whose prices will struggle to compete on the basis of the strength of the Canadian dollar.