Why the American Economy is hurting Canadian poker players

[boose_bagina]

No one is pushing for the American Economy to improve more then Canadians with thousands $ online in USD funds.

Today: $1USD = $1.17CAD
June: $1USD = $1.26CAD
Jan/02: $1USD = $1.60CAD
http://ichart.yahoo.com/z?s=USDCAD=X&z=m&t=my

Just curious, but does the US dollar have any effect on American players?

[crazy canuck]

I really don't want to think about how much I lost over the last 3 years because of this.

On the bright side it's cheaper to go to Vegas and we don't have to hear those lame american jokes referring to our weak loonie.

[SammyKid11]

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Just curious, but does the US dollar have any effect on American players?

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Considering that the value of the US dollar pervades every aspect of almost every American's life (even in ways most don't understand), yeah - I'd say it does. For me, I do quite a bit of business in Britain, and my dollars don't go very far there.

[Go Blue]

If this is seriously costing you a significant amount of money, then you should consider hedging against this. I'm not 100% sure on how the exact process works, but just as you (a Canadian) can buy USDs if you think they will appreciate relative to the CND, you can short the USD in this case against someone who thinks the opposite. In my opinion, it's not worth doing because you're not really losing a LOT of money unless you have at least tens of thousands of dollars online. But you can think of like this: it might be costing you money now, but pretty soon, the USD will likely appreciate versus the CND and you will have made extra money as a result.

[MicroBob]

indeed.

having a load of money that you hav ebuilt up for several wks/mths would suck and obviously you would want to consider delaying cashing-out if realistic.

But the American dollar isn't going to be struggling forever (we hope).
I would strongly consider using some of those Canadian dollars to BUY some American bucks.


I don't really follow it....I had NO idea that the American dollar was THAT low compared to the Canadian dollar.
I'm used to it being in the $1.50 - $1.70 range.

[DrawDeadJed]

This isn't an anti-U.S. post, but as long as the U.S. gov't continues to spend hundreds of millions of dollars per day in Iraq, the U.S. dollar is buggered. Particularly when you couple that with the two recent hurricane disasters. The U.S. dollar started its downward spiral right around the same time as the "weapons of mass destruction" campaign began. When you're using internal money for an external purpose, the effects on the economy can be (and apparently are) crippling.

[TStoneMBD]

from what i understand, alot of investing giants are investing in foreign currencies for their long term strategies. if thats true then you should be expecting a long-term decline in USD.

as far as this thread goes, youd probably get more intellectual discussion in the stock market forum. if you were just trying to notify the internet gambling community of this problem however, then this is the right place.

[MicroBob]

yeah...I admit that I don't know diddly about such things.

just amazed to see the Canadian dollar so low because I just hadn't been following it.


If there are ideas that the american dollar will continue to decline then does that mean that it's possible the Canadian dollar could actually be worth MORE than the American dollar in awhile?

[daryn]

[ QUOTE ]
This isn't an anti-U.S. post, but as long as the U.S. gov't continues to spend hundreds of millions of dollars per day in Iraq, the U.S. dollar is buggered. Particularly when you couple that with the two recent hurricane disasters. The U.S. dollar started its downward spiral right around the same time as the "weapons of mass destruction" campaign began. When you're using internal money for an external purpose, the effects on the economy can be (and apparently are) crippling.

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and i'm not a racist, but...

[daryn]

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does that mean that it's possible the Canadian dollar could actually be worth MORE than the American dollar in awhile?

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"LOL"

[MicroBob]

it's at $1.17 CAD now...and TStone says that some are anticipating the decline to continue.

I have no freaking idea if it's possible or not.
But I think it would be kinda weird.

[arx]

International players will always be affected one way or the other. I spend half my time in Europe and half in the US so I always have to check up the conversion ratio before cashing...

Right now its the best it has been in soome time in Europe. We needed 1.30$ for every euro 4/6 months ago....now we only need 1.10$...

In theory, with the Fed raising interest rates, the $ should strengthen.

arx

[MarkD]

In the early 80's the canadian dollar was worth more than the US dollar.

[Voltron87]

wait, canadian poker players are complaining about the us economy?

LMAO

think about it

[Wyers]

[ QUOTE ]
wait, canadian poker players are complaining about the us economy?

LMAO

think about it

[/ QUOTE ]

Not all that ridiculous really. I well aware that there are bigger economical issues facing the world right now than my bankroll, however the current economic climate has impacted my bottom line.

We have this massive superpower to the south of us - obviously your economics have a significant impact on ours (not so much vice versa.... /images/graemlins/crazy.gif )

Online poker is conducted in American funds therefore my bankroll fluctuates day to day with the exchange rate. It was pretty sweet when our dollar was sitting at 64 cents. Withdraw a $1000 US from Neteller and have $1300+ hit my CDN bank account - guess we got kind of spoiled.

Not really worth a LMAO and not really complaning - just discussing the reality of the situation. Boose's misconception is that a rebounding US economy will drive our dollar back down. Not necessarily so. We are propping up a fair amount of this increase on our own now with our economy being so strong (for the moment anyhow). We may see a slide to the low eighties or high seventies but the 64 cent days are over.

For the record we really don't wan't an equal dollar. Canada primarily deals in exports so a comparably strong dollar actually hurts our economy. Most analysts agree that 64 cents was dangerously low and the companies that do rely on import were suffering greatly - ideally we should be around 75-78 cents.

As Bob stated... take those CDN dollars and buy US greenbacks.

[aslowjoe]

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In the early 80's the canadian dollar was worth more than the US dollar

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Not to be a pick but I am reasonably sure this is incorrect. It was more like late mid to late 60's.

The dollar is really killing me, a lot of my income was based on exports from Canada to the US. My income was down 25% the each of the last 2 years. Not to mention my poker inome because of the drop.

[TheTROLL]

I suspect the LOL was at the suggestion that there might be some reason it's not possible. There's nothing special about the US$/CN$ parity level, any more than the Euro/Dollar parity level, the Dow30 crossing 10,000 or the FTSE crossing 5,000. They're sometimes described as "psychologically important" around the time they get breached, but everyone adjusts to the new reality quickly enough...

[busguy]

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In the early 80's the canadian dollar was worth more than the US dollar

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Not to be a pick but I am reasonably sure this is incorrect. It was more like late mid to late 60's..

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Well actually Joe is closer . . . .

Prior to 1976 the Cdn dollar traded at or close to par (+/- .10 ish) with the US dollar for most of the century. It even held a premium over the US dollar at various points between 1952-1960 and 1970-1976.

Nice to know that blow-hards like Daryn find that fact (and the possibility of it occuring again) so funny . . . .

busguy

[Eder]

[ QUOTE ]
yeah...I admit that I don't know diddly about such things.

just amazed to see the Canadian dollar so low because I just hadn't been following it.


If there are ideas that the american dollar will continue to decline then does that mean that it's possible the Canadian dollar could actually be worth MORE than the American dollar in awhile?

[/ QUOTE ]

Us old farts remember our Canbuck worth $1.15 USD not that long ago...

[MarkD]

[ QUOTE ]
[ QUOTE ]
In the early 80's the canadian dollar was worth more than the US dollar

[/ QUOTE ]

Not to be a pick but I am reasonably sure this is incorrect. It was more like late mid to late 60's.

The dollar is really killing me, a lot of my income was based on exports from Canada to the US. My income was down 25% the each of the last 2 years. Not to mention my poker inome because of the drop.

[/ QUOTE ]

Alright, since you were a prick about such a minor point I will point out that you are wrong as well. The canadian dollar was greater than the american dollar in the early to mid 70's.

history of the canadian dollar (http://www.bankofcanada.ca/en/dollar_book/full_text-e.html)

Like it really mattered - the point I was making in response to Microbob's shock that this would be possible is valid regardless of the official date it occurred. But here's the quoted part of my source just so that I can look like a prick too.

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The dollar in the 1970s
Immediately following the government's announcement that it would allow the Canadian dollar to float, the currency appreciated sharply, rising roughly 5 per cent to about US$0.97. It continued to drift upwards through the autumn of 1970 and into 1971 to trade in a relatively narrow range between US$0.98 and US$0.99. By 1972, the Canadian dollar had traded through parity with its U.S. counterpart. It reached a high of US$1.0443 on 25 April 1974.

The strength of the Canadian dollar through this period can largely be attributed to continued strength in the prices of raw materials. There were also large inflows of foreign capital, partly reflecting the view that Canada's balance of payments was expected to be less affected by the tripling of oil prices that occurred through 1973 than that of other major industrial countries.

During the early 1970s, the dollar's strength was also due to the general weakness of the U.S. currency against all major currencies as the Bretton Woods system of fixed exchange rates collapsed. With the U.S. balance-of-payments deficit widening to unprecedented levels, the U.S. government suspended the U.S. dollar's convertibility into gold on 15 August 1971 and imposed a 10 per cent surcharge on eligible imports. This action followed a series of revaluations of major currencies. On 18 December 1971, the major industrial countries agreed (the Smithsonian Agreement) to a new pattern of parities for the major currencies (excluding the Canadian dollar) with a fluctuation band of 2.25 per cent. The U.S. dollar was also devalued by 8.57 per cent against gold, although it remained inconvertible. This last-ditch attempt to save the Bretton Woods system failed. By 1973, all major currencies were floating against the U.S. dollar.

The strength of the Canadian dollar against its U.S. counterpart during this period concerned the authorities, who feared the impact of a higher dollar on Canada's export industries at a time of relatively high unemployment. Various measures to rectify the problem were examined but dismissed as being either unworkable or harmful. These included the introduction of a dual exchange rate system, the use of moral suasion on the banks to limit the run-down of their foreign-currency assets, and government control of the sale of new issues of Canadian securities to non-residents. None of these options were ever pursued (Government of Canada 1972). However, under the Winnipeg Agreement, reached on 12 June 1972, chartered banks agreed, with the concurrence of the minister of finance, to an interest rate ceiling on large, short-term (less than one year) deposits. The purpose of the agreement was to reduce "the process of escalation of Canadian short-term interest rates" (Bank of Canada 1972, 15). Lower Canadian short-term interest rates and narrower rate differentials with the United States helped to relieve some of the upward pressure on the Canadian dollar. Monetary policy was also more accommodative than it should have been through this period, as the Bank of Canada sought to moderate the upward pressure on the currency.

After weakening temporarily in 1975 and falling below parity with the U.S. dollar, the Canadian dollar recovered as monetary policy was tightened to address rising inflationary pressures. The currency moved up to the US$1.03 level during the summer of 1976 in volatile trading, but the election of a Parti Québécois government in Quebec on 15 November 1976 prompted the markets to make a major reassessment of the Canadian dollar's prospects. Political uncertainty, combined with softening prices for non-energy commodities, concerns about Canada's external competitiveness related to rising cost and wage pressures, and a substantial current account deficit, sparked a protracted sell-off of the dollar, which lasted until the end of 1978. The dollar fell to under US$0.84 by the end of this period. It steadied in 1979, however, and recovered to roughly US$0.87 by the end of that year.



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[Freudian]

Over the last year or so the USD has gone from giving me 7.7 SEK (swedish krona) down to 6.5 SEK then slowly increasing to todays 7.8 SEK. I didn't do much withdrawing when it was very low.

Graph depicting the swings (http://www.valuta.se/valuta/ShowGraph.aspx?ValutaID=436491&Txt=Fixkurs)