Topic: How To Invest

Pat: Could you tell me the effect the decline in the Canadian dollar will have on the six big banks? Thanks.

Article Excerpt

The U.S. dollar accounts for most of the foreign currency-denominated earnings of Canada’s six big banks. Bank of Nova Scotia also has exposure to Latin American and Asian currencies, but these are down roughly the same amount against the U.S. dollar as the Canadian dollar. In general, the rising value of the U.S. dollar against the Canadian dollar (another way to look at the fall of our dollar) is a positive for the banks. That’s because it increases the contribution of their U.S. operations to their earnings. …