Monday, November 26, 2007

Strong Black Friday expected to boost greenback

The Canadian dollar edged higher Monday morning as markets in the United States reopened after the Thanksgiving holiday weekend.

By all signs, Black Friday – the biggest shopping day of the year for U.S. retailers – was a huge success as shoppers spent a record $10.3 billion on retail goods. Kicking off the Christmas shopping season, Black Friday is seen as the barometer for consumer spending for retailers. A huge sales day on Friday gave retailers and hopefully the U.S. economy a much needed shot in the arm.

The U.S. economy continues to face pressure as a result of tightening credit conditions and further slowdowns in the housing market. While many analysts have been warning of a consumer-led U.S. recession, this weekend's sales numbers seem to indicate that if the U.S. economy slips into recession it will have nothing to do with a lack of motivation from consumers to spend.

Strong commodity prices kept the Canadian dollar buoyant today as gold traded close to US$830 per ounce and oil continued to push towards the $100 per-barrel mark.

By 10:15 a.m. on Monday the Canadian dollar was trading at 1.0133 against the U.S. dollar, up from Friday's close of 1.0105 but down from its overnight high of 1.0203.

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