The Canadian dollar, the loonie, has remained relatively steady against the U.S. dollar despite projections of a decline in value after release of a jobs report last week.
On Memorial Day, photographer Troy Bennett and I headed to Old Orchard Beach to speak with retailers and hoteliers about the exchange rate with Canada — which is lower, at around $0.91, than recent years — to see if they were concerned that the trend would put a dent in business this summer.
Business owners and some early beachgoers from Quebec City said they did not expect the unfavorable exchange rate for Canadian tourists would curb tourist traffic. One hotelier said a continued decline, projected by some economists, could prompt him to accept Canadian cash at parity with the dollar.
If the Canadian dollar drops around 80 cents against the dollar, Dan Donovan, co-owner of Friendship Oceanfront Suites on Grand Avenue, said he expects there might be some vacancies on the beach. But that moment has not arrived.
James Marple, a senior economist at the Toronto-based TD Bank, said then that employment statistics released June 6 would be the next sign of the loonie’s fate this summer. He and other analysts expect it could drop to as low as 85 cents.
The Times Colonist reported that Canada’s addition in May of 28,500 jobs — mostly part-time — came in ahead of expectations, dropping the loonie just one cent U.S. Those figures came against strong U.S. employment growth, which carried the country’s job total past its pre-recession high.
But through the summer, according to weekly forecasts at the foreign exchange website Forex, will continue a slow decline against the dollar.
Senior Writer Kenny Fisher, a Toronto native, wrote this week: “US numbers have been generally positive, and Nonfarm Payrolls met expectations, pointing to stability on the employment front. Key Canadian releases have not been able to keep up, and USD/CAD could continue to move towards the key 1.10 level [Canadian dollar at 90 cents U.S.].”