[Eug]

A little over a year ago, I asked "How low can the US dollar go?". On May 1, 2006, the numbers were:

CAD: $0.899
GBP: $1.829
Euro: $1.262
Yen: $0.00885
Yuan: $0.125

Today (May 31, 2007) they are:

CAD: $0.936
GBP: $1.975
Euro: $1.345
Yen: $0.00822
Yuan: $0.131

The slide continues, except against the Japanese Yen.

[nonhuman]

I saw we just start using the pound.

From this day forth, my business shall accept payment in British Pounds Sterling as well as in United States Dollars.

[Doofy]

I've just found some belly-button lint which is worth more than a Yen.

[analogika]

So about a cent?

[Doofy]

Yes. Wanna buy it?

[analogue SPRINKLES]

More like how much lower can the US go in general.

[kmkkid]

There are predictions that the CAD will surpass the USD by years end. Bad for business, great for consumers.


Businesses have been dropping like flies in my city within the past month. A lot happen to be US companies pulling out because of exchange rates, and the poor economical state of the US.

[peeb]

Unless they are also in business. Or employed.

[kmkkid]

Originally Posted by peeb 

Unless they are also in business. Or employed.

No ****. I meant it's good for consumers with disposable incomes who will certainly be taking more trips to the US and buying more merchandise at cheaper prices etc.

[kmkkid]

I for one can't wait to see Apple release new Macs and have them actually be cheaper here than in the US

[pooka]

Originally Posted by analogue SPRINKLES 

More like how much lower can the US go in general.

We're taking you with us, Bubba.

[Yose]

Originally Posted by kmkkid 

There are predictions that the CAD will surpass the USD by years end.

I read it will be closer to 2009 that there is parity between US and CDN currency.

What is discouraging for me is the looming rise in interest rates. I've been exploring mortgages as I look towards home ownership and every percent it goes up the worse my options are.

[kmkkid]

Originally Posted by Yose 

I read it be closer to 2009 that there is parity between US and CDN currency.

What is discouraging for me is the looming rise in interest rates. I've been exploring mortgages as I look towards home ownership and every percent it goes up the worse my options are.

Ah. My source was my local paper. CBC is probably more accurate Anyways 4 cents more per dollar is really nothing.

[Eug]

Originally Posted by kmkkid 

Ah. My source was my local paper. CBC is probably more accurate Anyways 4 cents more per dollar is really nothing.

A 4% drop is pretty significant, over 1 year, esp. since this hasn't been a one time thing. ie. The US$, which was already dropping, dropped another 4% relative to the CAD$ in 1 year. Also, the drop relative to the GBP and Euro was much higher than 4% in the past year.

Originally Posted by kmkkid 

I for one can't wait to see Apple release new Macs and have them actually be cheaper here than in the US

Perhaps, but as the drop continues, US component/manufacturing pricing increases. Even the Chinese yuan has risen against the $, and not everything in Macs comes from China either.

For reference, here is the pricing of my May 2006 MacBook.

US$1099 MacBook - CAD$1249 (US$1124, +2.3%)
US$1299 MacBook - CAD$1449 (US$1304, +0.4%)
US$1499 BlacBook - CAD$1649 (US$1484, -1.0%)

The current exchange rate is:

1 US$ = 1.111 CAD$
1 CAD$ = 90¢ US

[kmkkid]

Originally Posted by Eug 

A 4% drop is pretty significant, over 1 year, esp. since this hasn't been a one time thing. ie. The US$, which was already dropping, dropped another 4% relative to the CAD$ in 1 year. Also, the drop relative to the GBP and Euro was much higher than 4% in the past year.



Perhaps, as the drop continues. US pricing increases. Even the Chinese yuan has risen against the $, and not everything in Macs comes from China either.

For reference, here is the pricing of my May 2006 Maybook.

What I meant was paying 4 cents on the dollar isn't a big deal to me; if our dollar only reaches 96 this year. Helluva lot better than the 25 cents a few years ago.

[OreoCookie]

I hope quite a bit lower, I get paid in Euros
It's good for businesses which are into export though … 

[Zeeb]

Buy Gold!

[olePigeon]

But, but, look at the stock market!

[Eug]

Originally Posted by Eug 

A little over a year ago, I asked "How low can the US dollar go?". On May 1, 2006, the numbers were:

CAD: $0.899
GBP: $1.829
Euro: $1.262
Yen: $0.00885
Yuan: $0.125

Today (May 31, 2007) they are:

CAD: $0.936
GBP: $1.975
Euro: $1.345
Yen: $0.00822
Yuan: $0.131

The slide continues, except against the Japanese Yen.

June 1, 2007

CAD: $0.943
GBP: $1.98
Euro: $1.344
Yen: $0.00819
Yuan: $0.131

Originally Posted by Yose 

I read it will be closer to 2009 that there is parity between US and CDN currency.

Some of the banks are now predicting that the CAD$ will be at par with the US$ by the end of 2007.

I don't quite believe them, but nonetheless that's what some claim.

Originally Posted by Yose

What is discouraging for me is the looming rise in interest rates. I've been exploring mortgages as I look towards home ownership and every percent it goes up the worse my options are.

If you are even the slightest bit considering buying in the next little while, then get pre-approved for a mortgage. They're good for 120 days, don't require any commitments, and don't cost you anything (except a little paperwork).

[Eug]

Originally Posted by Eug 

A little over a year ago, I asked "How low can the US dollar go?". On May 1, 2006, the numbers were:

CAD: $0.899
GBP: $1.829
Euro: $1.262
Yen: $0.00885
Yuan: $0.125

Today (May 31, 2007) they are:

CAD: $0.936
GBP: $1.975
Euro: $1.345
Yen: $0.00822
Yuan: $0.131

The slide continues, except against the Japanese Yen.

July 6, 2007

CAD: $0.955
GBP: $2.013
Euro: $1.364
Yen: $0.00812
Yuan: $0.132

Originally Posted by kmkkid 

What I meant was paying 4 cents on the dollar isn't a big deal to me; if our dollar only reaches 96 this year. Helluva lot better than the 25 cents a few years ago.

We're getting pretty close to that 96 cent mark now. (See above.)

[PEPPERRULES]

How high can the US deficit and/or debt go? Wait until China comes to collect.

[Eug]

July 16, 2007

CAD: $0.958 <-- It hit $0.9601 briefly today.
GBP: $2.036
Euro: $1.378
Yen: $0.00820
Yuan: $0.132

Originally Posted by PEPPERRULES 

How high can the US deficit and/or debt go? Wait until China comes to collect.

It's not in China's best interest to collect too soon. That said, China is diversifying its foreign currency reserves.

[Buckaroo]

I am not an expert, but I believe that our trade deficit has something to do with the value of the dollar. We are importing much more than we are exporting.

If we have any experts here, please correct me if I am wrong.

[Eug]

Originally Posted by Buckaroo 

I am not an expert, but I believe that our trade deficit has something to do with the value of the dollar. We are importing much more than we are exporting.

If we have any experts here, please correct me if I am wrong.

I'm no expert either, but you are correct. However, that's not the only reason. For example, having huge budget deficits to fund the war certainly doesn't help. Neither does the subprime mortgage debacle.

BTW, the subprime market is much more worrisome in the US than in other countries like Canada. The reason for this is more lax lending practices in the US.

[PEPPERRULES]

I think the Canadian dollar will be trading at par against the US dollar by early 2008. It was $0.62 earlier this decade.

[spacefreak]

Originally Posted by Yose 

I readWhat is discouraging for me is the looming rise in interest rates. I've been exploring mortgages as I look towards home ownership and every percent it goes up the worse my options are.

If you're discouraged about the current mortgage rates, you may want to reconsider buying a home altogether. Historically speaking, this is about as good a rate as one can expect to find. It's not the lowest that it's been, but it's still pretty darn low.

[Eug]

As far as interest rates go, some are saying that the longer you wait, the higher they'll go.

ie. Lock in a pre-approved mortgage now, and then look around again for some houses. If you can get something during the lock-in period, then great. If not, then you have more thinking to do.

Note though it's quite possible that home prices may decrease, depending on where you live.

Mind you, here in Canada, there is no drop in sight yet. Most are predicting either mild to moderate price increases, or a plateau for the near term in my area (Toronto).

[Yose]

As far as my purchase and my pre-approval goes, what is being offered is a 3 & 5yr market-capped mortgage at 7.25ish%. The mortgage won't be needed until around April 2009, and if the rates are still lower at that point I can take the lower rate, otherwise it'll be at 7.25%.

I'll be honest, 8 to 10 weeks ago a rate of 7.25% or higher bothered me. Not so anymore; I've spent a lot more time thinking, reading, talking and planning. The only thing I'm not so confident about is if I want to be tied down to a condo for at least 5yrs (starting 2009).

[nonhuman]

You won't be completely tied down, you can always rent it out. We just bought our condo in January, and our only potential issue was also whether or not we'd really want to be here for at least 5 years. In the end we decided probably, but that even if not we could make it work.

As an aside, is anyone else having a problem where MacNN is apparently randomly clicking links in the ads? It's been happening to me for a while now in Safari 3, but not with any other website...

[Zeeb]

Originally Posted by nonhuman 

As an aside, is anyone else having a problem where MacNN is apparently randomly clicking links in the ads? It's been happening to me for a while now in Safari 3, but not with any other website...

Yes, that has happened to me today as well--annoying. I'm on explorer.

[Dakarʒ]

Nothing wrong here on old Safari.

[PEPPERRULES]

Interest rates are still low. Look at the graph that dude posted above.

[Eug]

RE: Subprime meltdown - I came across this comparative graph of % of mortgage defaults, in Canada vs. the US.



At least until near the end of last year (no 2007 data listed), defaults were actually decreasing in Canada to close to 0.2%, whereas defaults had started increasing the years before in the US. That said, it's interesting to note that the defaults in the US since the initial uptick haven't changed all that much. They've been hovering around 0.8% for the past few years.

Still, the graph clearly shows the rate of mortgage defaults up here in Canuckistan is 3-4X lower than in the US. That's a pretty big difference, and probably goes a long way to explaining why there is no meltdown up here (yet). It will be interesting to see what happens if oil prices drop though. While home prices are going up everywhere, in some places they've started to level off somewhat (but not drop). However, places like Alberta and Saskatchewan (where there is lots of oil) have seen continued high increases in home prices. If oil prices were to drop, that would be a big pressure for home prices to drop too, and along with that our Canadian dollar would drop relative to the US dollar.

The good news for me though is that with dropping oil prices and a falling Canadian dollar, our local (Toronto) economy might just pick up, because we're more heavily dependent on the manufacturing sector than our Western bethren. That could stimulate home prices... after I have already purchased.

Originally Posted by Yose 

As far as my purchase and my pre-approval goes, what is being offered is a 3 & 5yr market-capped mortgage at 7.25ish%. The mortgage won't be needed until around April 2009, and if the rates are still lower at that point I can take the lower rate, otherwise it'll be at 7.25%.

I'll be honest, 8 to 10 weeks ago a rate of 7.25% or higher bothered me. Not so anymore; I've spent a lot more time thinking, reading, talking and planning. The only thing I'm not so confident about is if I want to be tied down to a condo for at least 5yrs (starting 2009).

I'm a little confused. You're pre-approved 2 years in advance?

Anyways, what are the general posted rates for 5-year fixed mortgages? In Canada they're at around 7.24% at the big banks, but some of the smaller lenders are down at 5.89%. (Some of the big banks will do around 6% as well, if you're a low risk client.)

I lucked out and got a rate significantly lower, but that's because I locked-in quite some time ago, and because I had a very good mortgage broker who went all out trying to get a lower rate.

[Eug]

Originally Posted by Eug 

July 6, 2007

CAD: $0.955
GBP: $2.013
Euro: $1.364
Yen: $0.00812
Yuan: $0.132

We're getting pretty close to that 96 cent mark now. (See above.)

The US dollar slide continues.

July 24, 2007

CAD: $0.965
GBP: $2.062
Euro: $1.381
Yen: $0.00829
Yuan: $0.132

So, when are they going to unpeg that Chinese Yuan? Assuming they don't unpeg it, they should at least revalue it again soon.

[Eug]

Originally Posted by Eug 

The US dollar slide continues.

July 24, 2007

CAD: $0.965
GBP: $2.062
Euro: $1.381
Yen: $0.00829
Yuan: $0.132

So, when are they going to unpeg that Chinese Yuan? Assuming they don't unpeg it, they should at least revalue it again soon.

Sept. 12, 2007

CAD: $0.965
GBP: $2.029
Euro: $1.390
Yen: $0.00876
Yuan: $0.133

The US$ has stayed stable or slightly lower vs. most of these, but has risen against the Pound.

P.S. I was in the US last week, and it sure was nice having a C$ near par to the US$. Made for some good shopping and eats...

[Sky Captain]

Let the US dollar slide below the Canadian dollar.
That'll bring US manufacturing sent to Canada back to the US.
It'll make US goods competative for export. And European goods too expensive.
And tourism too expensive.

[peeb]

The US - the new Mexico!

[Dakarʒ]

Originally Posted by Sky Captain 

Let the US dollar slide below the Canadian dollar.
That'll bring US manufacturing sent to Canada back to the US.
It'll make US goods competative for export. And European goods too expensive.
And tourism too expensive.

Why do we want tourism too expensive?

[peeb]

Sky Captain means (I think) that leaving the country will be too expensive for people earning in a declining currency. Domestic tourism, one presumes, will be more affordable. I'm not certain why 'we want' this.

[Dakarʒ]

Thanks, I did gather that. I'm asking why it's a good thing for us to not be able vacation in other countries affordably.

[nonhuman]

Originally Posted by Dakarʒ 

Thanks, I did gather that. I'm asking why it's a good thing for us to not be able vacation in other countries affordably.

Because the money we spend in other countries leaves the US rather than staying here and bolstering our economy.

[peeb]

So not good for the vacationer (less choice)? Trashing the US economy to the extent that the would-be-vacationer from the US is too poor in global terms to leave the country seems like a harsh way to bolster the US economy.

[Dakarʒ]

That's basically my thinking, peeb.

[nonhuman]

Originally Posted by peeb 

So not good for the vacationer (less choice)? Trashing the US economy to the extent that the would-be-vacationer from the US is too poor in global terms to leave the country seems like a harsh way to bolster the US economy.

Indeed. It would be a horrible way to go about it. But from a purely economic standpoint, it's best if people don't leave the country.

[Dakarʒ]

Realistically, I wonder if it doesn't just cause people to postpone their vacations or resign themselves to spending more (taking even more money out of the economy).

[nonhuman]

Originally Posted by Dakarʒ 

Realistically, I wonder if it doesn't just cause people to postpone their vacations or resign themselves to spending more (taking even more money out of the economy).

For some people, possibly. But for a lot more people I bet they'd just choose to take their vacations within the US or just buy something nice and stay at home.

[Sky Captain]

Bingo.
And it will bolster tourism from European tourists to the US.
Their money will go further.

[Eug]

That's also a consideration, yes, but obviously it does not solve the US's deeper economic woes. There is a reason the US buck is declining, and a boost in tourism alone isn't going to solve them.

[nonhuman]

Originally Posted by Eug 

That's also a consideration, yes, but obviously it does not solve the US's deeper economic woes. There is a reason the US buck is declining, and a boost in tourism alone isn't going to solve them.

Obviously the solution is to give business a cash infusion.

[tie]

Okay, we have Kevin in another thread arguing that Taiwan is part of China, and we have Sky Captain here arguing that it is a good thing that Americans can't afford to vacation abroad. What's up with you guys?