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Loonie gets a downgrade

TAVIA GRANT

Globe and Mail Update

Latest comment posted at 7:35 AM EDT 09/11/06

Seen easing to 82 cents next year as foreign investors lose interest after income-trust decision: JP Morgan ...Read the full article

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  1. JM Work from Canada writes: Havent Ontario and Quebec been crying over the strong dollar?

  2. Mitsu of Kingston from Kingston, Canada writes: How's that Mr. Flaherty for a vote of confidence in Canada's economy?
  3. BC Refuge in AB from Canada writes: Excellent news for our ON/QC manufacturing base, hopefully they don't continue to rely on a low dollar to prop up their business, but instead think outside the box and modernize and diversify their business. Time to look at another model besides building auto parts for the North American market. I work in the oil sands and have to buy $millions offshore every year because I can't find a manufacturer in Canada to bid on the work......
  4. k b from Canada writes: If all the Canadian dollar had going for it in the eyes of those foreign investors was the fact that they could suck money out of the country without paying tax on it, then so be it. As an aside, lower oil and natural gas prices will be short lived so I doubt the loonie will drop as low as 82 cents. The only thing that really will hurt the Canadian dollar in the long run is a recession in the US, which isn't far-fetched. In the mean time, a slightly lower dollar would help alleviate the pressure on Ontario's manufacturing sector, and that is not a terrible thing.
  5. Paul Gaynor from United States writes: I really doubt the Loonie is going down to 82 cents on the income trust decision and lower oil prices. Canada's economic fundamentals just keep getting better over the long run as the budget surpluses keep coming and the unemployment rate slowly goes lower. I expect it to bottom out at maybe 85 cents at worst, and then resume its climb once the next budget surplus comes in and natural resource prices start going up again, as they will. Sure Ontario and Quebec will get a respite, but all this international competition through the strong dollar will in the end run be the illness that strengthens Canada's economic well-being, rendering it more immune to downturns in manufacturing in the future. Chicago went through the same decline during the 1980s, and today it is doing better than ever. Hopefully both Ontario and Quebec take note of the success of economic diversification. I predict parity for the Loonie by the year of 2015. The fundamentals of the global economy (especially India and China's economies) support this more than any income trust decision made by Mr. Flaherty. Watch J.P. Morgan eat their words within the year...
  6. M.L. R. from Toronto, Canada writes: To No. 4 kb

    think about it, US investors GIVE THEIR MONEY to canadian companies called trusts and pay 15% tax for the privilege. Further they don't live here and hence don't cost us any money ie health, infrastructure and so on . . .

    Where will these companies get capital now?
  7. Chris Jury from Tokyo, writes: I think it was the Canadian companies themselves who were avoiding taxes, not the foreign investors.
  8. Dan Green from Toronto, Canada writes: Morgan Stanley loonie prediction.

    Even if this bank predictions are correct, it will take more than a .82 cent dollar, to prop up Ontario and Quebec manufacturing. Have been in Canadian manufacturing for 25 years. The system was modeled after a 70 cent dollar. Anything thing above that means Canadian manufactures have to set their sites on domestic sales.

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