Loonie strengthens for a third straight week, narrowing the U.S. visitor discount

THREAT · Hotels & Tourism · Currency and pricing

The Canadian dollar traded near 1.386 per U.S. dollar on August 17, according to Trading Economics, after a third consecutive weekly gain that has lifted the loonie roughly 1.5 per cent over the past month. Stronger-than-expected Canadian employment and factory sales, second-quarter GDP growth of 3.4 per cent annualized, and narrowing yield spreads with the United States are cited as the drivers; the consensus outlook has the currency holding around 1.39 into quarter-end and firming toward 1.37 over 12 months.

What it means: The ‘Canada is on sale’ story that has helped Alberta win U.S. share is not gone, but it is getting slightly weaker. Operators marketing into U.S. drive and fly markets should lean less on implied exchange-rate savings and more on experience, scarcity, and value inclusions — and revisit any USD-anchored rate strategy for winter before the gap narrows further.