"Canadian Dollar at 3 Year High" What does this mean to you? A lot!
Again this morning, we are seeing headlines that say "Canadian Dollar Hits a Three Year High"
What exactly does this mean to you when purchasing an item in the U.S. and importing it?
Well, quite simply 'A lot!' - it means that you're saving a lot of money on the exchange, and again on Duties and Taxes.
When you buy an item in the U.S. and pay U.S. dollars for it - that amount is always converted into Canadian dollars before you pay any Duties and Taxes on it. So, if the exchange rate is lower - you are not only going to spend less Canadian dollars for the actual purchase - but you are are also going to spend less in duties and taxes because of that low exchange rate.
These headlines that we see are sometimes confusing so I thought I would do a bit of history of exchange rates over the past 10 years - from 2001 to 2011.
Below, you will see the difference in exchance rates and the impact they have on the purchase price. To give a broad range / idea - I did the calculations at $300 (About how much you'd spend on some clothes), $3000 (About how much you'd spend on some high end electronics), $30,000 (About how much you'd spend on a nice car), and $300,000 (About how much you'd spend on a condo in Phoenix, Arizona!).
In the last 10 years, the cost of buying and importing these goods has declined signficantly! (Espcially for that condo in Phoenix!)
Take a look at the chart below - and you'll realize the huge savings and why now is a fantastic time to import.