The Canadian dollar retreated from a new 28-year high capping a strong May 2006. The loonie depreciated to 90.79 cents (U.S.), down .09 cents on the day. The loonie rose as high as 91.44 cents, its highest level since Jan. 4, 1978.
Robust growth is also adding to the appeal. Canada’s economy grew at 3.8-per-cent rate in the first quarter, a sharp pickup from the 2.6-per-cent annualized pace in the previous quarter, Statistics Canada said before the market opened.
The loonie has soared 14.5 per cent in the past year, the world’s top-performing currency, making factories’ goods much more expensive when sold outside of Canada. At the same time, the U.S. currency was little changed against the euro and the yen but has weakened throughout this month.
The loonie held its gains after a report showed the country’s economic performance was stronger than expected in the first quarter. But guess who’s complaining, Ontario, and all other manufacturing provinces. The manufacturing industry, which has shed hundreds of thousands of jobs in recent years. Bombardier Inc. chief executive Laurent Beaudoin yesterday lashed out at the Bank of Canada for failing to stop the currency’s rapid appreciation. We say get your act together Bombardier and stop complaining. Manufacturing firms who say they can’t compete with a high dollar should be slapped. Your firm artificially competes with US counterparts. Rather than innovation, some manufacturers relied on a weak dollar. Forget about expanding R&D, let’s use the dollar as a crutch.
They should have hired some economists to predict the increase in the dollar. All the leading ‘right wing’ economists in the west knew the dollar was going up nonstop since 2003. Idiots like sherri cooper and company said it was going down to .50. Now who’s laughing? Dumb manufacturers in Ontario should have seen it coming and done plently more to develop their technology so they can compete at the higher costs (or on par with the States as it were). But you can’t blame them for trying to get the Bank of Canada to intervene.