The Flying Loonie

Budget-conscious travelers who were priced out of the French Riviera when the dollar hit new lows against the euro always had Montreal. But not anymore.

The Canadian dollar, also known as the "loonie" for the bird on its dollar coin, traded equal to the U.S. dollar today for the first time since 1976. The loonie has staged an impressive comeback since it hit its all-time low of 61.79 cents in 2002.

In trading this afternoon, the Canadian dollar hit $1.0002 before retreating back to just below 100 pennies. The Federal Reserve's half-point cut in interest rates helped push the Canadian currency up this week. The Bank of Canada left its rates unchanged this week.

While Americans struggle with a credit crisis, a worthless dollar, and depreciating homes, it seems our neighbors to the north are basking in the warm glow of a strong economy and a buoyant currency.

The strength stems from the rising demand for Canada's commodity exports, like metals, coal, and wheat. While worldwide energy costs soar, Canada is more than happy to provide it. The country is the world's biggest uranium producer, the second-largest natural gas exporter, and it sits on the largest pool of oil reserves outside the Middle East, Bloomberg notes.

And the good news for the Canucks it doesn't stop there. Foreign investors are pouring money into Canadian deals, the International Monetary Fund predicts that Canada will have the fastest-growing economy of the Group of Seven nations in 2008, and the country has run 10 consecutive budget surpluses.

"Canadians should understand that this is a badge of confidence in our country,'' Frank McKenna, deputy chairman of Toronto-Dominion Bank, told Bloomberg.

Canadians should also understand that when Americans pay $3.99 for the same newsstand magazine that costs $4.99 in Canada, they are now officially getting ripped off.

And Americans should understand that the trip to Saskatchewan is going to cost even more than planned.

Baja, anyone?

by Megan Barnett

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