Canadian Dollar Catching Up With The American

The Canadian dollar has long played second fiddle to the American. The economy in America has seen massive growth over the last 20 years, and although Canada hasn’t been doing too badly either, they have never been able to emulate the strength of their southern cousins. However, as people going on Canada holidays may have noticed recently, with the recession in full flow, Canadian money in closing the gap and their economy looks to be more stable than in the States.

Really two influences hold the key to how and why this situation has come about. To begin with, America has maybe not been as careful with their borrowing of money as the Canadians have been. Avoiding too much technical talk, American people and the country as a whole have borrowed a great deal more money than Canada has done. This initially helped the economy grow somewhat, but has meant that as banks themselves struggle for credit, lots of people are finding themselves in trouble and unable to meet the payback demands from banks. The American dollar was severely hurt as a result.

Secondly, the GNP of America is heavily reliant on the oil and industry sectors. In fact these two areas alone contribute to around a third of all national product, which is a bit of a blow when you consider they have been hit hardest in the recent recession. Industry has been affected mainly because demand has dropped for things like cars and other machinery, and oil has suffered due to dwindling resources and the ability of counties in the Far East being able to flood the market with cheap oil.

This is good news of course for Canadians who are planning to go on American holidays, as they their money will go further than it has done for a long while. However, if you are an American thinking about visiting Canada, it’s probably best to stick to Alaska holidays for now.