The US dollar continues to fall against other major currencies and, if the trend continues exporters could soon feel the squeeze.
On Wednesday, at the Guyana Bank for Trade and Industry (GBTI) the Pound Sterling was sold at $390 and bought at $310; the Canadian dollar (Cdn) was sold at $190 and bought at $160 and the US dollar was sold at $204 and bought at $196.
Republic Bank was selling Pound notes at $398 and buying at $375; Cdn notes at $208 and buying at $200 and the US dollar at $202 and buying at $195. At Demerara Bank Pound notes were sold at $340 and bought at $370; Cdn notes at $170 and $150 and the US dollar at $204 and $200.
At Swiss House Cambio the rates for US dollars were $203 and $200, Cdn notes $210 and $203 and Pound notes at $414 and $404.
At Republic Bank US drafts were being sold at $206 and being bought at $200; Cdn drafts at $211 and $203 and Pound drafts at $420 and $400. At GBTI, Pound drafts were sold at $410 and bought at $370, Cdn drafts at $190 and $160 and the US drafts at $205 and $198. All the exchange rates were valid for Wednesday and do not reflect today’s rates.
On Monday the Canadian dollar reached a 47-year high above US$1.05 due largely to lofty commodity prices and speculation about the US Federal Reserve rate cut, Reuters said on Wednesday. The Canadian dollar remained high at US$1.05 on Wednesday. The Pound Sterling is also at a 26-year high against the US dollar, at over US$2 to one pound.
An MSN Money internet report said that for the second time the US Federal Reserve cut its key interest rate – the federal funds rate – from 4.75% to 4.5%, in a bid to keep the economy from weakening further. The rate is what banks charge each other for overnight loans and affects everything from auto loans to credit card rates. So locals with international credit cards can expect to feel the impact. But as the US dollar continues to slump, it may stop the Fed’s rate-cutting for now, MSN said. A falling dollar is great for US exporters but makes exporting to the US more expensive. According to a Tuesday report in the Canada-based Financial Post the Export Development Canada Chief Economist Stephen Poloz said that Canadian exporters have been trying to maintain export sales even as the rising Canadian dollar has squeezed their profit margins.
One businessman told Stabroek News yesterday that the weakening US dollar means that buying goods in that currency is more expensive. He said local prices have increased due to the weakening dollar, along with the rising cost of fuel and transportation. Yesterday the price of crude oil reached a record high of US$94 a barrel, on the back of the weakening US dollar.