Well I would take a different view of things. I don't see the dollar going below 1.10 unless the economy suddenly drops again which very few people see happening. If the economy tanks again then the demand for the greenback will rise, thus increasing it's value.
Should the economy continue to slowly come out of this recession as it is right now, then the US dollar is going to fall vs the CDN. Why? Well there's a number of reasons, but the top 2 being:
1 - The US has printed more money than Canada during this recession. I don't think you need to be an economist to know what the impact that additional supply of money has on the supply/demand for their dollar and what it does to the value.
2 - The price of commodities (not just oil) should continue to go up and if this happens, the CDN will rise as well since the price of commodies has a massive impact on Canada's resouce based economy.
If anything, I see Canada getting close to par by the end of the year should the world economies continue to slowly come come out of this global recession.
|