Bond, a consultant for Canada's Hong Kong bank, says economic problems in Asia have accelerated the loonie's dive. Asian demand for Canada's natural resources, like the sulfur at a Vancouver area dock, is down. This dampens demand for Canadian dollars and lowers the dollar's value. If I'm in Japan and I want to buy a ton of wheat from Canada, I got to pay the Canadian in Canadian dollars, so I go to my bank and say here's some yen, give me some Canadian dollars. Well, if I'm not buying wheat, I'm not demanding Canadian dollars.
Demand curve shifts down, the price falls.
The falling Canadian dollar has been good news for some but bad news for others on both sides of the border. For companies like Oregon-based Pope and Talbot it's been a big plus. In February, this forest products company spent a bargain 69 million American dollars to acquire majority interest in British Columbia's Harmac Pacific. Pope and Talbot CEO Mike Flannery. The economy - the economic environment of the depreciating dollar certainly enhances that ability for us to do it.