With the increasing strength of the Canadian dollar and the continual weakening of the USD, it's only a matter of time before we reach parity. With the Canadian interest rates holding steady and with the US feds expected to start a cycle of reducing interest rates, we should see the CAD/USD @ close to 1:1 soon. Some analyst say before the end of the year. As of today, the exchange is $1.027 or $0.97.
However, nothing is ever certain with interest rates, but hypothetically speaking, how can the typical Canadian take advantage of the cheap USD?
1. Cheaper travel to the US.
- This is a great opportunity to bring the kids to Disney world, or to take a cruise at a bargain price.
2. You get to purchase quality USD stocks within your RRSP at a low forex rate.
- Remember, when you buy/sell USD stocks within your RRSP, you are faced with forex fees in every transaction (buy AND sell). This is because the brokerages do not allow USD within your RRSP account (a pet peeve of mine).
3. Cheaper to purchase items on eBay which are listed in USD (like most items are).
- For me personally, I like to shop around for deals on eBay, so this is a great opportunity to purchase items @ a discount. I remember buying stuff on eBay when the exchange was around $1.5 and I still found deals then!
So, back to you, how will you take advantage of the low exchange rates?If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).