99 cents

[Miskiin-Macruuf-Aqiyaar]

Loonie vaults over 99 cents US in overseas trade

 

September 19, 2007 -

CBC

- Canada's currency continued its flight toward parity with the U.S. greenback as the loonie briefly breached the 99-cent US mark in overnight trading on global currency markets.

 

The Canadian dollar set another standard in overseas trading at 99.18 cents US.

 

Following the release of surprisingly benign Canadian inflation data, the loonie lost some ground in North American trading. The dollar closed at 98.50 cents US, off 0.14 of a cent from Tuesday's close.

 

"Analysts say any day now, Canadians will wake up to find out a Canadian dollar is worth exactly as much as the U.S. dollar; maybe even a little more," CBC-TV's Danielle Bochove said Wednesday.

 

It's good news for shoppers, as the cost of goods imported from the U.S. should be coming down soon, though that does not happen in lockstep with the currency movement, in part because of differences in duties and shipping costs.

 

Holiday travelling to the States will also be cheaper.

 

On the negative side, the Canadian dollar, which has risen 15 per cent this year alone, has been tough to manage for exporters, forestry companies and manufacturers vulnerable to a strong loonie.

 

On Tuesday, SFK Pulp Fund cut its monthly payout to investors by 60 per cent, citing the higher dollar.

 

Fuelled by Federal Reserve interest-rate cut

 

"This reduction is a direct consequence of the continued strengthening of the Canadian dollar against its U.S. counterpart that deeply impacts the Canadian forest and paper industry," CEO Andre Bernier said.

 

The loonie's big move was helped along by the Federal Reserve's unexpectedly large cut in a key interest rate Tuesday afternoon.

 

The rate cut left the U.S. federal funds rate at 4.75 per cent, while the counterpart rate in Canada remains at 4.50 per cent. That dramatically narrowed the spread between the two rates and made Canadian dollars a lot more attractive.

 

Talk of "whether" the dollar would hit parity with the U.S. currency seemed to be supplanted by talk of "when" it would reach that milestone.

 

The Canadian dollar's rise against the U.S. greenback has been stunning — up 15 per cent so far this year and up about 60 per cent since early 2002.

 

'Petro currency'

 

That's when the commodity price boom began to exert its loonie-positive effect as the price of many resource products that Canada exports in abundance began to climb — with oil being a notably strong performer.

 

The loonie is widely seen as a "petro currency," meaning it is closely tied to the rise and fall of oil markets. The price of oil was hitting more new highs on Tuesday, rising 94 cents to close at $81.51 US a barrel.

 

The Canadian Auto Workers on Tuesday called on the Bank of Canada to match or exceed the Fed's rate cut.

 

"The U.S. Fed is taking the broader view, recognizing that central bankers have responsibility for the whole economy, not just inflation," said CAW economist Jim Stanford.

 

"It's time the Bank of Canada took a similarly broad view."

------------

 

Good news for Soomaalida, especially to those of us who use xawilaad companies. I remember the nightmare days of early '00s when boqol doolar US qofkii diraayo had to pay $165 Canadian dollars. Maanta jinjin ayaa la yahay.

 

I don't care about the Canadians complaining about everything from manufacturing jobs disappearing because of high export value to Hollywood-made films in Kanada vanishing because of high Canadian dollar.

 

To poor, struggling Soomaalis who qaraabadooda wax ka sugayaan, qaas ahaan bishaan soonka camal, this is beyond good.

 

Waaaaaaaay up to go, loonie.

[Som@li]

Good news for Somalis in Canada indeed, American Dollar waa u dhamatey, And most of the Gulf countries who still peg against the greenbuck waa la degeen.

 

-----------------------------

 

UAE, Qatar reiterate support for dollar peg

by Dylan Bowman and Reuters on Tuesday, 11 September 2007

 

The UAE and Qatar on Tuesday again reiterated their commitment to keeping their currencies pegged to the dollar.

 

Both Gulf Arab states also said they expected rising inflation, fuelled by the soaring cost of accommodation in both countries, to decline.

 

Qatar’s central bank governor Abdullah bin Saud Al-Thani said his country had no plans to depeg its riyal from the US currency, and that measures to control rent rises and other prices will reduce inflation.

 

"We are committed to the peg and also to the march of the GCC countries towards monetary union," Sheikh Abdullah told Reuters on the sidelines of the Arab central bank governors meeting in Damascus.

 

"We are taking measures to control prices and rents which would lead to a gradual decrease in inflation," he said.

 

Inflation will fall to 10% within a year, Sheikh Abdullah added.

 

UAE central bank governor Sultan Nasser Al-Suweidi also defended the dirham’s peg to the dollar.

 

"I have always defended the peg to the US dollar because all the basic facts that determine the peg of a currency to another are in favour of the U.S. dollar," Al-Watan daily quoted Al-Suweidi as saying.

 

Inflation in the UAE, which hit a 19-year high of 9.3% last year, has already started to decline, Suweidi said. Rental costs were behind 80% of inflation, he said.

 

"The rise in international prices represents 20%," Suweidi was quoted as saying.

 

The country's trade exchanges are predominately in US dollars, Suweidi added.

 

Kuwait broke ranks with its Gulf Arab neighbours in May and started tracking a currency basket, saying the dollar's slide on global markets was fuelling inflation by making some imports more expensive.

 

Kuwait's central bank governor said on Tuesday a decline in the value of the dollar, rising international prices and stronger domestic demand were driving inflation in the Middle East's fourth-largest oil producer.

 

"From the outside, the increase of prices abroad as well as the impact of the exchange rate fluctuation, and the deterioration of the dollar exchange rate" are underpinning inflation, Salem Abdul-Aziz Al-Sabah told reporters in Damascus.

 

"The internal factor is increasing aggregate demand," Sheikh Salem said.

[Som@li]

Kuwait drops dollar peg!

 

By Ulf Laessing

 

KUWAIT, May 20 (Reuters) - Kuwait unshackled its dinar from the tumbling U.S. dollar on Sunday and switched the exchange rate mechanism to a basket of currencies, throwing plans for currency union with other Gulf Arab oil producers into disarray.

 

Kuwait's central bank, which battled speculators for weeks to defend the peg, said the dollar's slide against other currencies had forced it to break ranks with fellow Gulf states to contain inflation from the rising cost of some imports.

 

The move stunned Gulf currency markets and volumes dried up. The impact would be clearer on Monday when international markets open, said Steve Brice, chief middle east economist at Standard Chartered Bank in Dubai.

 

Oman and Bahrain, the two smallest Gulf economies, and Saudi Arabia, the largest Arab economy, said they planned to stand by their pegs. There was no comment from the central bank of the United Arab Emirates, whose currency is likely to take centre stage on Monday as prospects for a single currency evaporate.

 

Kuwait was still committed to monetary union, the central bank governor said in a statement, after changing the dinar's rate to $0.228806, an appreciation of about 0.37 percent.

 

"The massive decline in the dollar's exchange rate against main currencies ... has contributed to the increase in local inflation rates and this step is part of the central bank's efforts to curb inflationary pressure," Sheikh Salem Abdul-Aziz al-Sabah said in a statement carried by state news agency KUNA.

 

Kuwait was named as the top candidate for a revaluation in a Reuters poll of analysts in March and markets piled pressure on the dinar, betting the central bank would allow an appreciation as the dollar slid to record low against the euro in April

 

More.........Reuters!

[Caano Geel]

Originally posted by Miskiin-Macruuf-Aqiyaar:

Good news for Soomaalida, especially to those of us who use xawilaad companies. I remember the nightmare days of early '00s when boqol doolar US qofkii diraayo had to pay $165 Canadian dollars. Maanta jinjin ayaa la yahay.

 

I don't care about the Canadians complaining about everything from manufacturing jobs disappearing because of high export value to Hollywood-made films in Kanada vanishing because of high Canadian dollar.

 

To poor, struggling Soomaalis who qaraabadooda wax ka sugayaan, qaas ahaan bishaan soonka camal, this is beyond good.

 

Waaaaaaaay up to go, loonie.

Saudi has unpegged itself from the dollar interest rate drops too, so it is abs news for the dollar, and those holding it. In effect this means that $1 is now worth less than it was worth yesterday, so its buying power has dropped. This is bad news for the xawilaad ants, especially those in the US, because the $50 dollars you used to send is worth $49 - so to maintain face value, the prices for goods in dollars have to rise, but not necessarily your wages. All in all, if the trend continues, expect to be sending more dollars to enable people to maintain the same quality of life, but at best from the same wage

[Cara.]

All in all, if the trend continues, expect to be sending more dollars

More than $50 anyway you quuni.

 

The Canadian dollar at 99 cents? There goes shopping trip to Toronto

[ElPunto]

Good for some, bad for others. If the Ontario economy sinks even more - Somalis will get negatively affected and that would reduce the amounts they would be able to send home.

 

PS - what the hell is 'quuni'?

[Libaax-Sankataabte]

The loonie hit parity this morning and then it leveled to 99 cents. There is a lot of demand in the world for Canada’s natural resources and that has somewhat justified the recent loonie soar. However, the new rush to parity isn’t really justified in economic sense. Yes the days of 60 cents loonie are long gone and Canada has a competitive world class economy primarily driven by hot commodities, but the staggering loonie jump to parity is fuelled more by US weakness rather than Canadian strength. The fascinating thing is that folks are talking about a loonie that is worth 10 cents more than the US dollar in the coming months.

 

Good for working Somali Canadians.

[Miskiin-Macruuf-Aqiyaar]

Well, well, well, it finally equaled into a parity and even surpassed the US dollar today, when it later cooled off, closing at 99 cents.

 

Caanageel, I understand where you are coming from. I am very aware about the sicir barar the declining US dollar is causing especially to those at home xawilaad ku xiran. Many of xawilaad recipients already switched to euro.

 

What I had in mind was locally, to those of us who live in Kanada and send xawilaad. At least we can tell them we sent a hundred or two hundred US dollars. It saves us a greater deal, honestly. You really don't know how bad it was in early '00s, when it was one day even $175 Canadian dollars, including the fees, sending a one hundred US dollar.