TORONTO, January 20, 2011 – The Canadian dollar flew above parity in the waning days of 2010, and is predicted to rise a few cents above the U.S. dollar by the end of 2011, according to Douglas Porter, Deputy Chief Economist, BMO Capital Markets.
“We believe that the Canadian dollar is likely to remain firm through 2011, with further gains still possible if commodity prices continue to forge ahead,” said Mr. Porter.
The strong dollar’s impact will vary across regions in Canada, and depending on the sector, will present some challenges and opportunities. Porter noted that manufacturing, tourism and some resource industries could face some difficulties as the loonie remains firm while utilities, broadcasters, sport teams and some retailers could benefit from a stronger currency.
“Parity with the U.S. dollar could represent a significant opportunity for Canadian entrepreneurs to enhance their productivity by upgrading or refreshing their equipment,” said Cathy Pin, Vice President, BMO Commercial Banking. “A strong Canadian dollar provides additional purchasing power when importing this equipment and purchasing supplies and inventory from the global market.”
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