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Canada's Loonie and The Budget

The dollar is breaking through 90 US today, and there are signs this just might continue.

It seems kind of quaint when I go back and read an earlier post on this blog that reports on concern about our climb out of the 60 cent range.

Part of the strength of our dollar is our strong equity in natural resources that are climbing in value. But our dollar growth has been much higher against the United States currency because of their deficit troubles. That's budget deficit, trade deficit, current account deficit, etc.

The US situation is in sharp contrast to the Canadian record over the past decade or so. With a new government and a new budget coming down today, I certainly hope that this is a lesson that can be learned by Harper, Flaherty et al. We need to keep our budget in the black and keep paying down the debt.

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