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Note: Today we have a section on the decline of the "loonie" (Canadian dollar) to $0.77 U.S. and implications for the Canadian economy.
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Currency Wars: The Maple Syrup Edition [Chart] (Visual Capitalist) Hat tip to Mickey Fulp via Twitter. Bank of Canada (BoC) has cut rates again, now down to 0.5%. See chart below for how BoC easing has been driving the exchange rate. Also see following two articles for historical context and more discussion. From this article:
10-Year CADUSD (Investing.com) Click on chart for latest streaming update. What are the implications of a lowering CADUSD? One is the negative impact on U.S. maple syrup producers due to the lower USD cost of imported Canadian syrup. See previous article. See also fourth article below. Quebec produces about 75% of the world's maple syrup and "sugar bushes" in the northern tier of U.S. states have prices more or less determined by Quebec, which has established a state controlled system for regulating production, marketing and sales of the product. Quebec even has a "strategic syrup reserve" which stores quantities of syrup in years of high production for suplementation of poor output years. Another area of impact is in U.S. real estate values near the Canadian border. When CADUSD is high there is Canadian demand for U.S. residential (and to a lesser extent, commercial) real estate, especially vacation properties in the mountains and on U.S. lakes. A third area involves Canda's manufacturing exports to the U.S. See second article below.
Conversion of 1 CAD to USD on 01 January 1990 (fxtop.com) The current six-year low is still higher than during the 1993-2004 period when CADUSD got as low as $0.6183 and averaged around $0.73.
A rising tide: What the U.S. recovery means for Canadian manufacturing exports (The Canadian Trade Commission Service) During the 2008-2009 recession, Canada’s manufacturing exports to the U.S. dropped by nearly a third from $251 billion to $180 billion. Manufacturing exports to the U.S. have recovered significantly since then; but, at $231 billion as of 2013, they remain 8% below their pre-recession level. The decline of the "loonie" (Canadian dollar) from above $0.90 U.S. to $0.77 since the start of 2014 should accelerate the growth of exports to the U.S. This will help the struggling Canadian economy offset some of the resource export losses, especially the decline in oil, natural gas and bitumen exports. See also Canadian manufacturers take big hit (The Globe and Mail). The first hint of impact from the declining loonie came in March with the largest contribution of net exports to GDP in almost 20 years being reported for 2014: This Chart May Be The Best News In Ages About Canada's Economy (The Huffington Post).
Assessing the growth potential and economic impact of the U.S. maple syrup industry (Journal of Agriculture, Food Systems, and Community Development) over the past 25 years Canada (especially Quebec) has seen a dramatic surge in maple syrup production.
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