higher prices for goods anticipated - Windsor

2/10/2014
Canadian dollar expected to keep falling; higher prices for goods anticipated | Windsor Star
BUSINESS
BUSINESS
Canadian dollar expected to keep
falling; higher prices for
goods anticipated
Keith White, left, Freeds general manager, assists customer Kevin Larkin of Windsor who
was checking out the latest fashion at the popular Ottawa Street clothing store, Thursday
October 2, 2014. (NICK BRANCACCIO/The Windsor Star)
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Dave Battagello
Oct 02, 2014 - 3:12 PM EDT
Last Updated: Oct 02, 2014 - 6:35 PM EDT
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Canadian dollar expected to keep falling; higher prices for goods anticipated | Windsor Star
At Paris Motor Show, Carmakers
Hope to Impress

from over.
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A rebounding American economy the past year has fuelled renewed
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strength in the U.S. dollar against currencies around the world —
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dropping below 90 cents this week — experts anticipate the slide is far
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As the value of the Canadian loonie continues its downward spiral —
including Canada’s dollar which has dropped significantly from 97
cents a year ago.
“I think it’s heading lower to about 87 cents by the end of next year,”
said Sal Guatieri, senior economist for Bank of Montreal. “The main
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reason is interest rates should rise faster in the U.S. than Canada.
“The rates were much lower there and their economy is expected to
grow faster than our economy.”
Ontario prices its inaugural
global green bond offering
Clearly the
province of
Ontario was
determined to
make a splash
with its first
green bond
That stronger growth will translate into unemployment rates falling
faster in the U.S., which fuels higher interest rates. That makes the
U.S. dollar more attractive as an investment, increasing its value.
“We are already seeing that over the past year,” Guatieri said. “You see
that was priced Thursday
an influx flowing into the U.S. treasury market.”
The only thing that could prevent
the Canadian dollar from sliding
lower is if the Canadian economy
suddenly picks up much more
quickly, he said.
Ontario goes green and global
Ontario’s inaugural global green bond
offering, a $500-million offering of fouryear notes, were priced Thursday to yield
1.796%. Here are a few observations
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21 °C October 2, 2014
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Finance
Presently, the U.S. economy is
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projected to increase by 3.1 per cent
over the next year with Canada at 2.5
per cent, Guatieri said.
Implications for the average
Canadian consumer are higher
Dan Orman of Freeds in Windsor talks
about the low Canadian dollar on
October 2, 2014. (NICK
BRANCACCIO/The Windsor Star)
prices since many of our consumer
goods are from the U.S., he said.
Durable goods such as appliances or
furniture are most likely to be
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these real estate writers
Booming real
estate markets
are producing
another kind
of bubble, an
expansion of
authors
writing about a looming crash
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Canadian dollar expected to keep falling; higher prices for goods anticipated | Windsor Star
affected, but also potentially food and gas prices.
“A lot of things go up in price when our currency goes down,” Guatieri
said.
On the flip side, seeing the Canadian dollar slide spells good news for
local businesses, said Matt Marchand, CEO of the Windsor-Essex
Regional Chamber.
“It’s helpful because it makes our businesses more competitive,” he
said. “Cross-border shopping gets diminished so it becomes a net
positive for our region.”
Marchand indicated there will likely be “a lag effect” to consumer
behaviour in regards to any immediate patterns in shopping locally.
“But the longer (the dollar) stays down, it will certainly help,” he said.
“Over time, it will also bring people from (U.S.) jurisdictions over
here. The patterns will get crystallized more over time.”
Marchand believes the falling loonie could also potentially play a role
in attracting corporate investment to the area when U.S. locations are
also being considered.
“An advantage of 15 cents (on the dollar) is a lot better than zero,” he
Sizzling Vancouver home
sales likely to fuel national
bubble debate
Sales in
Vancouver are
soaring across
the board,
with the
average price
of a detached
home jumping 24% to $1.26 million
Finance Minister Joe Oliver
says Calgary, Toronto and
Vancouver distorting housing
numbers
Joe Oliver, the
federal finance
minister,
downplayed
fears of a
housing
bubble and
emphasized three of Canada's largest
markets continue to distort national
housing numbers
said.
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When the Canadian dollar was 25 to 30 cents below its U.S.
counterpart about a half dozen years ago, one of the more aggressive
advertising campaigns to attract shoppers to Windsor from Michigan
was launched by Freeds clothing store.
The dollar is nowhere near that level yet, but attracting U.S. shoppers
to take advantage of our lower dollar is a much different story today
due to tighter border restrictions, said Dan Orman, co-owner of
Freeds.
“When we advertised in the states, that was always icing on the cake
for us,” he said. “Our biggest focus has always been on Canadians to
think twice before going over there.
“Once you pay tolls, your gas and look how your $100 is only worth
$85, maybe you think differently about cross-border shopping. With
the dollar going lower, we concentrate on giving Canadians the best
Why buying the dips still
makes sense
Alex Lane,
portfolio
manager at
Dynamic
Funds,
believes
buying the
dips in equity markets will keep paying
off despite the recent declines
Closing Bell: TSX piles on
further losses as oil and
copper prices hit multi-month
lows
The Toronto stock market extended its
losses Thursday with resource stocks
leading the way as oil and metal prices
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Canadian dollar expected to keep falling; higher prices for goods anticipated | Windsor Star
value.”
Orman indicated the dollar would really have to bottom out and reach
at least 25 cents lower than the U.S. dollar before any thought is given
to fighting to attract more Michigan shoppers.
“If that happens we might tap into that market again,” he said.
broke through
important
levels amid a
strong
American
currency and
worries about
a faltering global economy
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Marchand, U.S. Dollar, Ward 4, Windsor, Windsor-Essex Regional Chamber
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