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Canadian dollar hits a 30-year high With Canadian dollar at 95 U.S. cents, Americans lose buying power across border

The Canadian dollar continued to grow stronger Friday, topping 95 cents (U.S.) for the first time in 30 years.

The latest step up for the Canadian dollar, fueled by a positive jobs report in Canada, means greater buying power for Canadians at U.S. stores, and fewer bargains for Americans spending their bucks in Canada.

"I think there will be more incentive for Canadians to spend some of that spending power they have over here," said Gary Keith, an economist at M&T Bank Corp.

Keith said the stronger Canadian dollar is good news for malls such as Walden Galleria, which are already magnets for Canadian shoppers.

The trend also benefits concerts and other entertainment attractions in the United States that draw people over the border, he said. The exact amount of that cross-border spending isn't precisely known, he added.

Keith said he also wonders how much of a damper the robust Canadian dollar will have on Americans who were accustomed to stretching their dollars on travel and shopping in Canada.

"It's always been a help for Western New York," he said. Presently, a U.S. dollar is worth about $1.04 in Canadian currency.

Ed Healy, a spokesman for the Buffalo Niagara Convention and Visitors Bureau, said Canadians already have an affinity for shopping in the Buffalo area. The CVB's goal, he said, is to build on that and persuade them to extend their stays in order to see and do more things.

"With their dollar being worth more, I think they'll be more inclined to do that," Healy said.

The Canadian dollar hasn't traded at par with the U.S. dollar since 1976. As small as the margin is, Keith said he is doubtful the Canadian dollar is about to reach that point again, based on forecasts he has read.

Some forecasts call for the Canadian economy, which has enjoyed robust growth lately, to cool off in the second half of this year.

The Canadian dollar advanced as high as 95.53 cents on Friday, before retreating slightly. A year ago, a Canadian dollar was worth 90 U.S. cents, and five years ago, it was the equivalent of just 66 U.S. cents, according to Bank of Canada statistics.

The rise in the Canadian dollar has not translated into more vehicles crossing from Canada into the United States on the Peace Bridge.

The bridge reported a 2.4 percent decline in the number of cars and trucks traveling in that direction from a year ago, and a 2 percent drop in the number going from the United States into Canada.

The region's other two major spans, the Queenston-Lewiston and Rainbow bridges, also reported declines in traffic in that period.

Concerns about border security and the documentation travelers are required to carry might be contributing to those trends.

Andrew Rudnick, president of the Buffalo Niagara Partnership, said the Canadian currency's climb underscores the close relationship between the two nations' economies.

"The more parity there is, the more there can be one binational economy," he said. "The currency is one of the things that gets in the way of that."

Rudnick said the close connection between the two economies reinforces the need to ensure a smooth flow of traffic at the border, so that shoppers, diners and sports fans can easily reach their destinations.

Could the stronger Canadian dollar stimulate more business investment by Canadian companies in the United States?

Keith and Rudnick agree that it would take a longer-term currency trend to persuade business executives to make those types of decisions.

From the U.S. perspective, Keith said, "if a manufacturer is sourcing something from Canada, it's just gotten a little more expensive."

The Associated Press contributed to this report.

e-mail: mglynn@buffnews.com

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