Thursday, September 20, 2007

Loonie Mania

Parity, eh?

The Canadian dollar reached parity with the U.S. dollar today for the first time since November 1976.

Known as the loonie because of the bird pictured on the one-dollar coin, the Canadian dollar has been gaining ground on its American counterpart since hitting an all-time low of 61.79 U.S. cents on Jan. 21, 2002.

....This week the loonie rose sharply against its U.S. counterpart after the Federal Reserve announced a dramatic half-point cut in its benchmark interest rates. The Bank of Canada, meanwhile, has kept its equivalent rates stable.

As a result, the spread between U.S. and Canadian interest rates widened, making Canada a more attractive place for German, Japanese, American and other foreign investors to put their money.

The soaring loonie also reflects the strong fundamentals of the Canadian economy, which has benefited from record world crude-oil prices and strong demand for metals, coal, chemicals and grain.

Well, just wait til we roll out our new designer five spot:

Honest Abe will become Colorful Abe with splashes of purple and gray livening up the $5 bill.

....The changes are similar to those already made, starting in 2003, to the $10, $20 and $50 bills. In those redesigns, pastel colors were added as part of an effort to stay ahead of counterfeiters and their ever-more-sophisticated copying machines.

Originally, the five wasn't going to be redesigned. But that decision was reversed once counterfeiters began bleaching $5 notes and printing fake $100 bills with the bleached paper to take advantage of the fact that some of the security features were in the same locations on both notes.

To thwart this particular scam, the government is changing the $5 watermark from one of Lincoln to two separate watermarks featuring the numeral 5. The $100 bill has a watermark with the image of Benjamin Franklin.

The security thread embedded in the $5 bill also has been moved to a different location than the one embedded in the $100 bill.

"We wanted this redesigned bill to scream, 'I am a five. I am a five,'" Larry Felix, director of the Bureau of Engraving and Printing said in an interview with The Associated Press.

"We wanted to eliminate any similarity or confusion on the part of the public between the $5 bill and the $100 bill."

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