» Canadian and American Buck Reaches Parity

Depending on how many decimal places you want to go to, the Canadian dollar is worth the same amount as the American dollar. The almighty US dollar that the world uses as a benchmark has been on a steady decline. Buoyed by the recent interest rate cuts in the US, the Canadian dollar finally hit the magical 1.000 mark.

The Canadian dollar is expected to reach as high as US $1.10 as we move forward. While it may be a great thing in the short term for consumers looking for great deals south of the border, long term this is not good for the Canadian economy. Canadian exports are now too expensive for American companies (they are afterall, our largest trading partner). Here is a particularly interesting quote from the article:

The U.S. shouldn’t be the focal point any more. When China evolves from the seventh largest economy in the world to the third largest economy within a three-year period, wake up. In our lifetime the U.S. dollar is no longer going to be the reserve currency of the world.

Equalizing Prices

I’ve noticed that prices are being adjusted on newer products to help slow-down the cross border shopping. For example, when I was looking for a new TV, the Sharp 46″ D64U, the price in Canada was $2599, the US price was $2499. With only a $100 price difference, its not worth buying from a US retailer.

In the automotive world, Porsche is also slashing prices on its Canadian models to help keep the business on this side of the border. The average price decrease is 10%. Its not enough to bring the prices to parity, but its enough to stop the casual cross border shopper from picking up their new Porsche from an American dealership. What the article didn’t mention is that prices at American dealerships are also going to be increased slightly because of the weakening dollar.

Blogging Income

While my online income has taken a huge hit all year, it is offset by the fact that internet marketing is also cheaper now since most if not all places charge in US dollars. Adwords, Text Link Ads, and even a page on the Million Euro Wiki are all cheaper now to purchase.

I think all Canadian bloggers like me will have to get used to the lower earnings as the weak US dollar is expected for much of 2008. One American dollar may only result in 90 Canadian cents when receiving earnings deposits later next year. I think when it does dip to that point, I’ll be using something I wrote about when this blog first started to take advantage of currency flucuations using Google’s help.

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