Here are two unrelated items about exchange rates:
1. From Marginal Revolution:
Canadian shoppers taking advantage of the parity between the U.S. and Canadian dollars are leaving behind more than cash when the head home.
They're leaving behind their old clothes.
Some Canadian shoppers wear their new clothes home to avoid paying a duty when they cross back into Canada. The old clothes get left behind in parking lots, dressing rooms and restrooms at malls and shopping plazas in the Buffalo-Niagara Falls region.
This could have gone under the "trade in everything" theme, but I put it here because I have this next item to mention ...
2. From an AP story reported in various papers, regarding the increase in foreign buyers of U.S. real estate due to the dollar's fall:
The currency advantage is greatest for British citizens, given that each pound is worth well over $2. By contrast, the euro currently is worth about $1.45 while the Canadian dollar in recent weeks is hovering near parity with its U.S. counterpart.
Sigh. If I'm reading this correctly, the AP reporter seems to think the strength of a currency is based on the absolute numbers. Thus, under this view, the UK has a stonger currency than Canada because one British pound buys 2 US dollars whereas Canada's dollar only buys 1 US dollar. This kind of confused thinking out there in the media can only make the policy debates more muddled.
