By Ray Bullock, Lake Chapala, Mexico www.focusonmexico.com We just received a recent article published in the Sept issue of the Calgary Herald which shows the recent fluctuations in the exchange rate of the Canadian dollar vs the US. Dollar could give Canadians looking at retiring or investing in Mexico, a special buying opportunity right now; considering that most real estate in Lake Chapala, Mexico is in US dollars.
Hi Ray, I just wanted to send you an interesting article from the Calgary Herald that HiFX was quoted in regarding the recent weakness in the Canadian dollar (CAD).
Various factors, including falling commodity prices, especially oil, have influenced this and CAD hit a recent low against the US dollar (USD) of .9239 on Thurs, Sept 11th.
More recently, though, CAD has regained nearly 5% of its strength against USD, hitting a high of .9701 on Tues, Sept 23rd. This swing happened in less than six days, and represents a dramatic change in the favor of your Canadian buyers. Use this information wisely!! Well-publicized uncertainty in the US financial markets has been the main driver for this rebound, but many factors have contributed.
The lesson? As always: you never know which way the exchange rate will move! Offer your clients the opportunity to ‘lock in’ to an exchange rate with HiFX now so they do not have to be at risk!! I’m available at (877) 999-4439 and thomas.wight@hifx.com if you need more information. All the best,Tom Wight
Read excerpt: U.S. dollar threatening Canadian buying powerChuck Chiang, Calgary Herald“Canadians considering taking advantage of the exchange rate with the U.S. dollar and buying real estate south of the border should keep a close eye on the strengthening greenback, says an expert. With the Canadian dollar trading at around 93 cents US on Tuesday after reaching well above parity, snowbirds may want to buy sooner rather than later, says Wayne Lee, senior marketing manager with HiFX Inc. "If the U.S. dollar gains back even half of what it has lost, investors in Canada will lose significant purchase power," says Lee, adding that the U.S. Federal Reserve may also boost prime interest rates to ward off inflation, further damaging the loonie's value. "If an investor doesn't buy right away, they may miss the window of opportunity," he says." The U.S. dollar's comeback is at its very early stages, but it is a trend we are seeing. We already see the slowdown in European countries." HiFX Inc. is a subsidiary of British-based HiFX plc, one of the largest independent foreign currency exchange firms in the world.” For those of you who have attended a Focus On Mexico Program, you will remember that we discussed the importance of exchange rates on Canadian Purchasing Power in Mexico. This article demonstrates this concept quite clearly.
HiFX International Currency Exchange is a company that we recommend in our Focus on Mexico Program and many Focus Alumni have used them. Without exception they have told us of having a good experience and they have SAVED MONEY.
Using the exchange rates quoted in this article, the following calculation exemplifies the impact. Rate differential 0.9701 – 0.9234 = 0.0462 On an exchange of $300,000 US to Canadian, the impact is $13,860. So, if you purchased a property in Mexico (usually priced in US dollars), the difference in what you would pay converting Canadian dollars to American dollars would be $13,860. Not an insignificant amount.
The reason we are sending you this Special Report is that many of you have told us that you are considering moving to Mexico in the next one or two years. If you plan on moving here and buying a home then you really should pay particular attention NOW to the impact of exchange rates. Consider this example:Remember not too long ago when the exchange rate was 0.68 to the US Dollar. At that time, to purchase the same $300,000 US property would have cost you $441,176.47. At the 0.9701 rate, it would cost only $309,246.47. This is a difference of $131,930 Canadian. Now that is a number that requires considerable attention.
We are not saying that the Canadian dollar will go back down to the 0.68 rate, but we do want you to be aware that exchange rate fluctuations can have a significant impact and should be considered in your planning process. If you believe that the Canadian dollar will be lower in the future against the US dollar, then you should take steps to protect your purchasing power right away.
Article in Calgary Herald cont’d: “Lee says Canadians looking to buy may want to consider entering a forward rate program, which locks in currency exchanges at current rates for up to two years. The practice is similar to fuel hedging, where some airlines bought jet fuel at a locked-in price years ago, prior to the energy price spike of the last three years. The technique made several airlines much more profitable than their competitors. Lee says a similar move could be helpful to Canadian investors if they think the U.S. dollar will continue to gain strength. "It's more of a protection against changing rates," he says. "Some of the airlines that didn't hedge oil went out of business. The Canadian dollar is based a lot on commodities -- and commodities are down." The ability to lock in an exchange rate for a period of up to two years is indeed a significant service that HiFX offer. This means that you could lock in today’s exchange rate for money you will want to exchange (for a home purchase) within the next two years. There is a process to go through which is best explained by the HiFX people.
If you are considering moving to (or investing in) Mexico within the next two years, then make the dollar exchange rate a part of your planning. Checkout the HiFX program at hifx.com and then contact them to see what they can do for you. (Tell them Focus sent you.)
And don’t forget, if you have not been on a Focus on Mexico Program, then go to our website www.focusonmexico.com. There is no better way to get all the information and experience you need to make an informed decision about living in Mexico. In addition to money exchange, you’ll learn many other things that save you money and keep you out of trouble.
Best wishes and maybe we’ll see you soon in Lake Chapala, Mexico Ray Bullock: President of FocusOnMexico.com. Focus offers 8-Day Educational Tours to Lake Chapala, Mexico. Expert speakers on: Health Care, Real Estate, Legal System, Immigration, Bringing Pets, Cost of Living, US Taxes, Non-Residency for Canadians, Living Lakeside, Investing in Mexico, Mexican Economy & more... You get everything you need to decide if Lake Chapala is right for you, plus lots of fun in the process. |
