Windsor not much of a bargain, eh

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Windsor not much of a bargain, eh?

• By Louis Aguilar / The Detroit News
• January 18, 2004

http//www.detnews.com/2005/business/0501/18/A01-6
2829.htm
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Downtown Windsor

• WINDSOR -- Chason Pierre puffed on a Cuban Cohiba
  Exquisto cigar at Cheetahs club in downtown
  Windsor. Amid the thumping techno music, the last
  thing on the Detroiter's mind was the falling
  value of the U.S. dollar.
• The dollar is on a long slide and now trades for
  1.20 Canadian, down from nearly 1.60 two years
  ago. "Even if the damn thing drops to 1.01," he
  said, "there's enough crazy people like me who
  are going to go for that edge."
• But Metro Detroiters may not be as crazy as he
  thinks.
• The weak U.S. dollar is taking a chunk out of
  Windsor's economy as fewer Americans shop, drink
  and eat in "the city of roses."
• The declining U.S. dollar is more bad news for a
  Windsor tourist economy still suffering from the
  effects of the September 11 border crackdown.

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Dollars Tumble

• Canadian manufacturers say the 's tumble is
  squeezing profit margins, while residents who
  work in Detroit say the exchange rate is pinching
  their paychecks.
• "It's tough, no question," said Dan Orman,
  co-owner of Freeds, the largest independent men's
  clothing store in Canada.
• Freeds is among dozens of retailers including
  restaurants, clothiers and other small businesses
  who say the weakening U.S. has translated into
  a drop in business. Several businesses estimated
  the drop at about 10 percent
• "When people can remember when one U.S. meant
  1.60 in Canada, it's difficult for them to see
  the current rate," Orman said. "The loyal
  customer still understands the value, but we
  really have to step up the advertising and make
  sure customer service remains top-notch."

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Economics

• Foreign Exchange
• 1.60 L / . What does it mean for U.S. buyers?
• Each dollar buys 1.6 L. Its cheap to shop in
  Windsor
• 1.20 L/. Each dollar buys 1.2 L. Its expensive
  for U.S. people to shop in Windsor, BUT
• 1L now buys 0.83. Before 1L bought 0.625.
• SO, more Canadians shop here! Its bad for
  Windsor Crossing but good for Oakland Mall!

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Why did this happen? What does it mean?

• The U.S. imports far more goods than it exports.
  The gap means are flowing out of the country to
  pay for such foreign goods as oil and textiles,
  creating an oversupply that lowers the s value
  on the world market.
• A weak U.S. means Americans find it more
  expensive to travel abroad. Goods produced
  overseas cost more here, while U.S. products are
  cheaper for foreigners.