Unexpected Increase in Canadian Dollar.

¶ … unexpected increase in Canadian dollar. Canadian dollar was to a great extent lower than the U.S. dollar but from May 2006 it has smashed all the preceding records and has become equal to 90-cent U.S. dollar, which is a threat for U.S. economy and also for Canadian economy. There are various opinions of diverse peoples, some consider that this sudden rise is in favor of economy while others think that it is damaging Canada's economy.

The effect of soaring Canadian dollar

Canadian dollar which has become general dialogue now a days because of its unexpected rise which has surprised peoples. In May 2006 Canadian dollar increase and smash all the previous record and attain the boom that is 90-cent U.S. dollar this loonie will further raise it is believe of many economist. In this article we will study different views of different people about this sudden rise we will also study its effect what are its pros and what will be its cons on economy Some peoples believe that this is the immense success and will always be remembered while on other hand economist believe that it is threat for Canadian economy because it can demolish business, employment and financial system. Some economist consider that if U.S. will be below same financial situation then it will favor Canadian dollar to increase more and there is also a believe that hard work should be made to bring to an end this rise in order to save Canadian economy.

The effect of soaring Canadian dollar

In January 2002 Canadian dollar was near to the ground but unexpectedly in 2006 the Canadian dollar initiates increasing. In distinction to other currency specially U.S. dollar

Canadian dollar has achieved more than 40%. In May 2006 Canadian dollar breaks all the previous record and attain its highest rate since 1978 and reaches 90-cent U.S. dollar. It is the firm believe of few economist that that loonies will keep rising which could be gigantic threat to other country some analyst moderator that it is moment for that thing to happen which hasn't happen since 1976 that Canadian dollar will become much more higher than U.S. dollar. The economist analyzed the reason which is making U.S. dollar less worthy than the Canadian dollar they consider that U.S. has to compensate for all trade in for instance oil, gas, cars, car's part and for other yield to Canada for doing this they have to trade dollar in international market. (cbcnews, May 2, 2007)

There is a firm believe that behind acceleration of Canadian dollar major fact would be gold prices, solid return principally wheat are speeding up the loonies value. BMO capital market deputy chief economist Douglas porter said that "I'd like to say we are nearing the end of the run, but I can't say that confidently." He calls the loonies nothing short of incredible. Paul Jenkins senior deputy governor warned the downside of this rise he claim that loonie was very burly than the central bank so it could harm the Canadian economy, he also that the combination of less U.S. dollar and high Canadian dollar rate will effect drag on Canadian economy. On the other hand some analyst believes that this ascends can boost more if U.S. financial system will be in same situation and it is a threat for U.S. economy. This loonie is also dangerous for Canadian economy according to Paul Jenkins but from the point of observation of public they are very glad as they believe that in earlier period it was America who has mocked their currency. (Neenah chaudry, november7, 2007)

One more outcome which is mostly seen due to raise in Canadian dollar is on U.S. Medicare system is that the American dollar has befall less valuable in Canadian Pharmacies which has produced more troubles for Americans as they are receiving medicines on advanced prices.

A aspx?e=This high only is not only being threat for Us economy but also for others too it has touches the boom although it has start coming back down little but still it is a threat for economy recently Dalton MCguinty calls at the bank of Canada as it is damaging their province they said that this has harm their province much more than the western Canada so its time to take benefit of interest rate reduction in additional words they should do something which will formulate Canadian dollar less attractive in international market. There is a firm believe that this high rate can not only damage economy of any one province but it can do similar for entire Canada so federal government should do anything which can make it comes beneath control while on other hand some people believes that this boost Is making Canada more powerful as compare to U.S.. (nfreview, November 7, 2007)