CanadianDollar posts

SLIDESHOW: WORLD'S WORST CURRENCIES

• Is the Canadian Dollar Caught in a "Death Grip"?
• Loonie will Stay at Par with U.S. Dollar: Flaherty
• Loonie at Par Means Shopping, Vacation and Investment Bargains

For winter weary Canadians, heading to the southern United States from November to April has been a way to survive until Mother Nature brings the warmer temperatures back.

In the past, US housing prices may have been out of reach for many of us, but in 2011, we're becoming cross border shoppers for more than just clothing from Target - Canucks are investing in property south of the border.

According to a recent article in the Financial Post, the combination of a strong Canadian dollar on par with its US counterpart and the slow recovery of the American housing market has made property investment in places like Florida and Arizona 'a perfect storm' for buyers.

After a shocking start to the year, Canadian pension plans recovered most of their losses toward the end of 2010, helped by stock market gains and a slight rebound in long-term government bond yields.

Investment fund managers expect this gradual improvement to continue in 2011 as stock markets rise and long-term bond yields inch marginally higher on the back of interest rate increases, according to a survey by Mercer Investment Consulting.

Pension plans suffered throughout the first three quarters of 2010 due to declining long-term government bond yields, a factor that offset decent stock market returns. However, Mercer says a 20 basis point increase in yields in the last three months of the year helped the typical balanced portfolio to a return of 9.2 per cent over the year. Mercer data show that 'Canadian equities' was the best performing asset class in 2010 with a return of 17.6 per cent. On the other hand, the strengthening Canadian dollar had a negative affect on foreign equity returns throughout the year.

Things have been on the mend for the Canadian economy and conditions are going to continue to improve this year, Canada's Big Five bank economists say. Even so, economic growth will likely creep along at a slower pace than in 2010, meaning there will be no quick return to the boom times that preceded the recession of 2008-2009.

"Exports remain challenged by a strong loonie, and domestic consumption growth will be moderating, either through rate hikes or other measures, as Ottawa attempts to slow the climb in household debt," says CIBC economist Krishen Rangasamy.

While there is no doubt that the Canadian economy will continue to grow in 2011, economists are divided on exactly how much. Some experts, such as at Scotiabank and CIBC, foresee a slow 2.2% pace of growth in 2011 largely due to the high Canadian dollar, weak exports and struggling foreign economies. Others, such as RBC, have a much stronger outlook.