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Ok, so it may not be the sky, but the dollar has been losing ground against just about every currency out there. You may have heard something about this or maybe not, either way, you should know how it affects you.
I remember going on my 6th grade class trip to Canada and being amazed at the differences in price on just about everything. That was way back before I was the savvy market analyst I am now (I guess that depends on who you ask) and knew about exchange rates and the fact that different currencies are actually worth more (or less) than others.
I remember finding a video game I wanted to buy in the U.S. at a Canadian mall for $70. “This Canada place is pretty pricey,” I thought; that same video game was only $50 back in the states. I came to find out that $70 Canadian was about the same as $40 USD at the time; well that was it, I had to have it.
Unfortunately for you would-be cross-border shoppers, you can’t find that sort of bargain these days in Canada. Why? Because the U.S. Dollar, over the past several years, has been losing quite a bit of ground against just about every other currency out there. Take a look at this chart showing the exchange rate from USD to CAD over the past 4 years…
As you can see, back in ‘03 the US Dollar could fetch about $1.60 Canadian. The tables have turned and the Canadian Dollar is, in fact, worth more now than the US Dollar; these days the US Dollar will only fetch $0.98 Canadian. So, as you can see, there’s no longer any point in going to Canada…ok, maybe for hockey. 
So what does this have to do with you? Well, when the U.S. Dollar loses ground against the rest of the world’s currencies, you have inflation; and inflation, as we know, is a very bad thing for mortgage rates. Inflation is, basically, a measure of the change of a dollars purchasing power, and when you live in a global economy, global purchasing power is a part of that equation as well.
Yet another reason why I don’t foresee mortgage rates coming down anytime in the near future (or even the next several years for that matter).
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