If you’re moving to Canada, pourquoi est-il important de attention à l'évolution du taux de change entre les Etats-Unis. et en dollars canadiens?

Parce que selon la manière dont les monnaies sont en mouvement, it can cost you big bucks.

Here’s what happened to the city of Vancouver.

As reported in today’s Vancouver Sun under the headline, “Exchange risk could cost city $60 millions: Prêt pour le village olympique doit être remboursé en AMÉRICANO. dollars bought when the loonie was aloft,” the city has gotten into trouble over the financing of the new Village olympique:

Just when you thought you’ve computed all the risks from the Olympic village crisis, here’s another. The $1.2-billion development has been financed using international “currency swaps,” one of the riskiest ways to borrow.

Here’s the situation.

The builder of the Olympic village, Vancouver’s Millénaire pour le développement, arranged to borrow its construction budget for the Olympic Athletes’ Village from Wall Street’s Fortress Investment Group. That $750-million line of credit was to be borrowed in U.S. dollars, ensuite échangés contre des huards, pour payer les entrepreneurs.

That probably seemed swell at the time. Our loonie was flying high back then. For a period it was even at par, ou au-dessus de la AMÉRICANO. greenback, and seemed destined to float there. Etats-Unis. dollars actually seemed cheap.

Autour alors, nous savons millénaire a commencé à tirer vers le bas sur $300 million of that $750 million Fortress loan, though exact dates of when money was drawn aren’t public. But supposing Millennium made its draw when the loonie was at par, ou si. Millennium would have roughly gotten a one-to-one deal on its loan. Voilà: $1 Canadian = $1 US.

Pas mal. How can you go wrong with a deal like that?

Eh bien, quite easily when world currency currents turn against you.

Photo par Payton Chung (Flickr)