Just when we thought things were getting better, the world economy gets shaken up by a Greek debt crisis and sends stock exchanges and currency markets into a tizzy. Before the latest crisis, all the signs had pointed to the loonie sticking at parity with the U.S. dollar and likely even surging back towards that US$1.10 high of November 2007.
But, on a dime, it all changed as cautious investors looked for safe places to park their money in case the crisis grew out of control. The Canadian dollar is down at about US93 cents, 7 cents short of where it was just a month ago. Looking at it historically, the loonie is at a firm level, and once the markets are confident the Greek debt crisis is under control, it should once again begin to climb against the greenback.
But we often get too carried away with what the loonie is doing against its biggest trading partner and forget what's going on with the rest of the world. In fact, when we look at the Canadian dollar compared to other world currencies, the loonie has been putting in a stellar performance. So what does this mean for you?