Will the Canadian Dollar reach parity with the US Dollar in 2009?

It's Canada Day and for currency traders that just means a slow day in the Canadian Dollar FX world. So, I thought it would be a good time to kick off some reflection and contemplation on the longer term direction for the USD/CAD exchange rate.

Please be sure to vote in the poll and provide your comments below.

There are many good arguments suggesting that the Canadian Dollar will appreciate from current levels and equally good arguments suggesting the opposite.

Some factors in favor of the Canadian Dollar:

• Much better fiscal management than the US
• Much more stable banking system than the US
• Recovery in commodity prices, especially oil

Some factors working against the Canadian Dollar

• Aussie Dollar (considered an alternative currency investment to the Canadian Dollar) is likely to attract much more demand than the Canadian Dollar due to better than expected economic performance and higher interest rates
• US economy may be weaker for longer than expected, reducing demand for Canadian Dollars as global investors react to tight integration to the 2 economies
• Canadian Government is in a minority position and could fall at any time, increasing the chances that a new Government who is less fiscally responsible could be elected

These are only a small sample of the factors out there. Please place your vote in the poll and add your comments.

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