Post by Admin on Sept 22, 2007 8:34:39 GMT -5
The Canadian dollar on Friday hovered around par with the U.S. dollar all day, before closing at just under $1 US for the second day in a row.
The loonie was quoted at 99.91 cents US at the close of Bank of Canada trading on Friday, up 0.04 cents US from Thursday's close.
The Canadian dollar reached parity for the first time in almost 31 years on Thursday, as weakness in the U.S. greenback and higher oil prices gave the loonie the final push it needed to trade at par.
After opening exactly on par with the greenback Friday, the Canadian dollar turned lower soon after, when Statistics Canada reported retail activity fell for the second consecutive month because of widespread sales declines led by the automotive sector.
But after some bobbing and weaving, the dollar eventually headed higher by midday before reversing direction later in the day.
The loonie was quoted as high as $1.0061 US in overnight trading Friday.
Retail sales fell 0.8 per cent in July to an estimated $34.3 billion. That was below the consensus estimate, which called for a dip of just 0.2 per cent.
Excluding sales by new, used and recreational motor vehicle and parts dealers, retail sales fell 0.3 per cent.
Sales in the automotive sector fell 1.3 per cent in July because of a second consecutive monthly drop in sales at new car dealers.
Parity between the two currencies has raised questions about whether Canadians will increasingly go cross-border shopping — hurting retail sales in Canada.
Goods cost 24 per cent more in Canada
A just-updated survey by BMO Capital Markets shows that the average retail price gap on a typical basket of goods is 24 per cent higher in Canada than in the U.S. — with the biggest gaps on electronics, books, and cars.
"It may be only a matter of time before the cross-border shopping dam bursts again," says BMO Capital Markets deputy chief economist Douglas Porter. "It may already be happening online."
Porter said the pressure on Canadian retailers to lower prices "is bound to intensify" in the coming months.
TD Bank economist Pascal Gauthier agreed, but argued that the arrival of major U.S. retailers in Canada "reduces the likelihood of a cross-border shopping craze" because their products are now available in Canada.
"Canadian retailers won't sit idly by watching their sales slip" if the loonie remains at par, she added
The loonie was quoted at 99.91 cents US at the close of Bank of Canada trading on Friday, up 0.04 cents US from Thursday's close.
The Canadian dollar reached parity for the first time in almost 31 years on Thursday, as weakness in the U.S. greenback and higher oil prices gave the loonie the final push it needed to trade at par.
After opening exactly on par with the greenback Friday, the Canadian dollar turned lower soon after, when Statistics Canada reported retail activity fell for the second consecutive month because of widespread sales declines led by the automotive sector.
But after some bobbing and weaving, the dollar eventually headed higher by midday before reversing direction later in the day.
The loonie was quoted as high as $1.0061 US in overnight trading Friday.
Retail sales fell 0.8 per cent in July to an estimated $34.3 billion. That was below the consensus estimate, which called for a dip of just 0.2 per cent.
Excluding sales by new, used and recreational motor vehicle and parts dealers, retail sales fell 0.3 per cent.
Sales in the automotive sector fell 1.3 per cent in July because of a second consecutive monthly drop in sales at new car dealers.
Parity between the two currencies has raised questions about whether Canadians will increasingly go cross-border shopping — hurting retail sales in Canada.
Goods cost 24 per cent more in Canada
A just-updated survey by BMO Capital Markets shows that the average retail price gap on a typical basket of goods is 24 per cent higher in Canada than in the U.S. — with the biggest gaps on electronics, books, and cars.
"It may be only a matter of time before the cross-border shopping dam bursts again," says BMO Capital Markets deputy chief economist Douglas Porter. "It may already be happening online."
Porter said the pressure on Canadian retailers to lower prices "is bound to intensify" in the coming months.
TD Bank economist Pascal Gauthier agreed, but argued that the arrival of major U.S. retailers in Canada "reduces the likelihood of a cross-border shopping craze" because their products are now available in Canada.
"Canadian retailers won't sit idly by watching their sales slip" if the loonie remains at par, she added