While the Canadian dollar has been "strong" for some time now, it hasn't been this strong in nearly 30 years; the dollar yesterday topped 94 cents US. As reported by CBC News, CIBC Chief Economist Jeff Rubin projects parity with the American dollar by year-end.
Many fear manufacturing jobs will be hurt as exports are negatively impacted; evidence does not yet support this claim, though. Canada's economy continued to grow at an annual rate of 3.7% in the first quarter, and the unemployment rate fell to 6.1%, a decline of 0.3% from 12 months prior. The situation appears to have been well-managed by the Bank of Canada, and thus far, I see little cause for concern.
To the contrary, as Prime Minister Stephen Harper said yesterday to the CBC, the strong dollar "is a reflection of the underlying strength of the Canadian economy." He went even farther to say that to intervene to avoid potential job losses in the manufacturing sector would be a "huge mistake."
What do you think?
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