Canadian dollar reaches parity with US dollar
The rising value of the Canadian dollar briefly matched the falling United States dollar for the first time since 1976, before closing at 0.9987 US dollars on Thursday. The Canadian dollar has risen 62% since bottoming out at 0.6179 US dollars in 2002, following a steady decline since the 1976 electoral victory of separatist René Lévesque in Quebec which triggered economic fears about Canadian stability.
As a result of their rising currency, Canadians have enjoyed cheaper imports from the US and tourism in the US, while export industries have suffered. The Canadian dollar’s recent rise is partly due to the soaring prices of oil, gold, copper, and wheat, which Canada exports in great quantities. The Canadian economy has also benefited from Canada’s large budget and trade surpluses
The value of the US dollar has also fallen in relation to other currencies in the past year, while the Canadian dollar rose 16%, the Euro gained 6%, the Japanese yen about 4%, and the British pound 2%.
The US dollar took a sharp hit this week due to a higher-than-expected half-point cut in interest rates by the US Federal Reserve, intended to mitigate the effects of a deepening housing slump and turbulence in the credit market.