USA (2016) To Gain Deflation from Canada & Mexico

[Economy 53,076]

http://www.financialpost.com/m/wp/blog.html?b=business.financialpost.com//investing/market-moves/canadian-dollar-could-sink-as-low-as-68-cents-as-bond-with-oil-grows-to-worlds-strongest

 

Of the 16 most major/traded currencies in the world, Canada has by far the heaviest tie to comodities specifically oil with a coefficient of 0.56 which means 56% of movements in Canadian Dollar follow the price of oil

 

Canada is unique being the only developed Nation in the world (besides Norway) whose economy is resource export based

 

Mexico has the second highest relationship with oil of the major currencies with a coefficient of 0.41 meaning 41% of movements in Mexican Peso follow price of crude

 

The lowered estimates for 2016 crude prices means Canada's and Mexico's currencies will likely fall further. 

 

Canada being the US #1 biggest trading partner and Mexico #3 (next to China) will create downward inflationairy pressures and imports become cheaper for the United States

[venusian 4,686]

i dont know what any of this means lmao

[Economy 53,076]

4 minutes ago, venusian said:

i dont know what any of this means lmao

Ok simply put, low oil prices will make Canadas and Mexicos currencies fall further

 

Canada is Americas biggest trading partner and Mexico is the 3rd largest...

 

America thus buys a lot from the two countries. Because the US dollar will rise relative to them, imports from Canada and Mexico will become cheaper

[Luc 4,776]

The US makes most of its own products, exports and imports aren't really that high and the US economy can take a hit, they'll be fine.

[Economy 53,076]

15 hours ago, Luc said:

The US makes most of its own products, exports and imports aren't really that high and the US economy can take a hit, they'll be fine.

I wouldnt call this a hit. If anything its good considering a strengthening economy means rising inflatuonairy pressures and this helps them not have to raise rates as quickly

 

they are more domestic than most Nations but they still import enough for this to make a difference

 

here in Canada fruits and vegetables, pre-made frozen foods and meats (the main things we buy from the US) just keep going up in price thanks to our falling currency

 

I hope oil prices recover soon so our currency will stop collapsing cause my grocery bills are surging  

 

4 years ago our currency was at par. Now its fallen 29% and $1 (Canadian) is only worth 71 cents (US)  

[Luc 4,776]

40 minutes ago, Economy said:

I wouldnt call this a hit. If anything its good considering a strengthening economy means rising inflatuonairy pressures and this helps them not have to raise rates as quickly

 

they are more domestic than most Nations but they still import enough for this to make a difference

 

here in Canada fruits and vegetables, pre-made frozen foods and meats (the main things we buy from the US) just keep going up in price thanks to our falling currency

 

I hope oil prices recover soon so our currency will stop collapsing cause my grocery bills are surging  

 

4 years ago pur currency was at par. Now its fallen 29% and $1 (Canadian) is only worth 71 cents (US)  

What do you think of me, travelling abroad is now like 1.3x more expensive than it was a few years ago  and Europeans have barely profited from the low oil/gas prices due to the low Euro.

[Economy 53,076]

13 hours ago, Luc said:

What do you think of me, travelling abroad is now like 1.3x more expensive than it was a few years ago  and Europeans have barely profited from the low oil/gas prices due to the low Euro.

Oh yeah haha. The Euro has fallen just as much as Canadian dollar cause our exchange is still about the same

 

In Canada it fell a lot because of low comodity prices for: gold, copper, steel, potash, uranium, natural gas, coal, and the biggest one of course oil

 

In Europe the Euro fell a lot because of QE Mario Drahgi started

 

But i think part of the reason gas prices fell so little in Europe is because you guys tax it so heavily so much of gas costs are taxes than dont change. Gas in Europe is a fortune frig

 

Here in Canada our currency fell a lot too but weve still seen a pretty significant relief at gas pump. Prices have fallen from about $1.30/litre in my area to $0.99 on average. In Euros that would be even lower