Photo Credit: TMAB2003
I’m a Canadian who was born and raised in a small town near the Canadian and American border.
No kidding, my aunt was born in the United States because that was the closest hospital at the time. Of course, these days customs officers won’t let you cross over if you look like you’re about to give birth!
Because of this proximity to the United States, I’ve always had a particular experience with US/CAD exchange rates.
If the Canadian dollar was stronger, it meant that we could cross the border into the USA and shop with a strong dollar. We might vacation in the United States, or even cross over to have a meal at a US restaurant.
If the US dollar was stronger, it meant that we would see more American tourists in our small town and the surrounding towns. It would create tourism jobs and support local arts and crafts.
Looking At Exchange Rates From a Personal Viewpoint
Now with the Internet, anyone can order from an American online shop. So really, the US/CAD exchange affects us even more. We no longer need to live on the border to be affected by fluctuations in exchange rates.
As consumers, we prefer to have a strong Canadian dollar. It means our dollar goes further, and we can afford to buy more stuff in the US.
Looking at Exchange Rates From a Global Viewpoint
When we look at a strong Canadian dollar in terms of a global impact, we might notice that other countries are less likely to do business with us.
Canadian freelancers might be inversely affected by a strong Canadian dollar, since American companies might chose to hire freelancers in other countries instead.
Just like in the case of Canadian freelancers, the strong dollar is actually a weakness for the country’s industry.
Exploring all of the ramifications of a fluctuating Canadian dollar is beyond this post, but it’s something I wanted to highlight. I never saw these side effects because I was too close to the border.
Thinking Global and Acting Local
Like with most things these days, it is best to think globally and act locally. If you can support the local businesses during times when the Canadian dollar is strong, you can still benefit from using your strong dollar abroad.
So the next time we’re out celebrating our strong Canadian dollar, let’s just remember what kind of impact this might have on our country.
** Readers, Have you noticed the rush to spend in the US when the Canadian dollar is on-par with the US dollar?