We were promised a summer of parity with the Canadian Dollar and the American Greenback. But now, the uncertain economic climate in Europe is wreaking havoc on the markets here in North America, with an especially heavy effect on the Canadian Dollar.
The dollar closed at 93.43 cents U.S. on Thursday, which was down 2.37 cents from the day before.
Business Commentator Paul Martin says the big swings we’ve seen over the last few weeks has been caused by the financial collapse in Greece. He says, “that’s got people excited that maybe Greece isn’t the only one in Europe with a problem, that the debt situations in Spain, Portugal, Italy, Ireland, and even France and England might be what’s causing all the uncertainty. And uncertainty means people will flee to the US dollar. And when the US goes up, ours goes down.”
Martin goes on to say, “there’s a relief package in place from the IMF and the European Union. That did give some support about a week ago, where we dollar go up and lots of people getting excited about it. Now they’ve had time to think about it and say ‘well, the underlying structural problem is still there’. Greece is spending more than its taking in, and it’s got to realign the way it operates.”
And it doesn’t look like things will be getting any better. Martin says that it will take some time before we’ll see any lasting changes, saying, “it’s hard to make plans when the dollar’s moving 3, 4, 5, 6 percent in a week. Whether it’s up or down doesn’t really matter. It’s that kind of rapid movement that really shakes people’s plans, you can’t plan very far ahead and that’s quite disconcerting.”
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