A strong Canadian dollar has a lot of consequences, some of them good, some of them bad. There’s no way to predict, however, particularly in an economic environment such as the present, where a reordering of global influence overlaps with political upheaval in key energy-producing regions, what an extended stay above parity, or beyond, or even a precipitous short- or medium-term swoon, will do to the Canadian economy and for investors in high-yield Canadian stocks.

A continued rise against the US dollar from here, of course, means de facto dividend boosts for American investors in Canadian stocks, just as a rapid decline would hurt brokerage statements.

Another thing we’re pretty sure about is that the loonie rises and falls with oil. That, too, is an extremely general statement, and evidence is accumulating to suggest other factors, such as Canada’s federal budget situation and the general soundness of its financial system, are keeping it aloft. But it’s a safe bet that if the Canadian dollar is on the up-tick, so, too, is the price of oil.

At a pace that’s too fast the loonie, in recent years, has dipped ahead of crude, as the market begins to anticipate demand destruction because of a too high, too fast rise for black gold. So, insofar as US investors are concerned, there is a sweet spot where global growth is not too fast, not too cold, geopolitical tensions aren’t stretched in multiple locales and Mother Nature is calm. Of course it’s never really like that.

There are curious implications for domestic economic behavior and decision-making. One Vancouver, British Columbia, RV dealer, for example, cut prices on every new vehicle he stocks by 5 to 10 percent in January, when the loonie began to hover around parity with the US dollar after a long assault on that symbolic benchmark.

Voyager felt some pricing power because it imports brands from the US; those American RVs looked a lot better on a cost basis, and the dealer decided to pass it along in the form of savings for Canadian customers.

The big worry is that a strong Canadian dollar will strangle domestic manufacturers. It’s interesting, though, that according to Statistics Canada the Toronto, Ontario, area seems to be pacing Canada’s economic recovery–Toronto, the biggest city in the biggest manufacturing province in the Great White North. Ontario has an historic relationship with Detroit and the Big Three Two automakers, which are also enjoying what seems a renaissance because of the troubles they’ve seen.

Big Canadian corporations, the stocks of several of which we follow in the Canadian Edge How They Rate coverage universe, have decisions to make, too, driven by the implications of a strong domestic currency. When companies buy foreign assets in large enough chunks that they get some say in how things are managed it falls within what the International Monetary Fund (IMF) calls “foreign direct investment,” of the outward variety. Inbound FDI is what happens when foreigners buy your assets.

It’s yet another anomaly that set Canada apart during the preceding half-decade, the fact that Canadian direct investment abroad increased in 2008, when, according to the Conference Board of Canada, the financial crisis/market meltdown/economic recession caused global outward FDI to decline by 20 percent.

Curious, yes, but two years ago the Canadian dollar had also surged past parity with the US dollar, making global assets cheaper on a relative basis for those who use loonie-denominated bank accounts.

The Canadian dollar had surged to a multi-decade high in the fall of 2007, which made foreign assets look cheap to Canadians, including Canadian corporations. FDI is a lagging indicator; the dollar amounts the measurement picks up reflect intentions from several months before, not current mindsets. Canada’s relative deal strength, as a country, shows up throughout 2008.

Together, finance/insurance and energy/minerals accounted for nearly three-quarters of all outbound foreign direct investment by Canada around the world. But the data reveal another curiosity about resource-rich Canada: In 2008 50 percent of its total FDI was concentrated in finance/insurance, up from 15 percent in 1983. Most of that money flowed to existing foreign subsidiaries in the US, as Canada-based parents moved to shore up their affiliates during the credit crunch and financial meltdown. Energy and minerals, No. 2 in the industry rankings, had fallen from 34 percent in 1983 to 23 percent in 2008.

Several of Canada’s Big Six banks have felt good enough about their positions relative to the US during the loonie’s now nearly decade-long flight that they’ve accelerated south-of-the-border expansion plans. But one is now rumored to be seeking buyers for at least some of its US assets, as in these cases items such as bad mortgages can’t be moved as easily as an RV.

Toronto-Dominion (TSX: TD, NYSE: TD), Royal Bank of Canada (TSX: RY, NYSE: RY) and Bank of Montreal (TSX: BMO, NYSE: BMO) are still struggling with recent US acquisitions, mostly at the retail level.

Our favorite of the Big Six, in fact, is Bank of Nova Scotia (TSX: BNS, NYSE: BNS), whose international expansion plan is focused on emerging markets in Latin America and Southeast Asia. These markets aren’t as mature, by definition, as the US, but neither are they overloaded with debt-heavy consumers. All the Big Six enjoy relatively healthy domestic consumer banking foundations; we like Scotiabank’s calculated risk-taking abroad in Latin America and Southeast Asia as a complement more than other banks’ efforts to grow in the US.

A couple have become bottom-heavy, as it were, by rapidly growing their American branches–to the degree that TD now has more south of the border than it does in Canada–and this has left them with considerable legacy exposure to the lingering subprime meltdown. Terms of a couple deals involve a certain amount of risk-sharing with US government agencies, but the fact remains these capital deployments won’t produce the kind of growth supportive of responsible dividend growth.

On the energy/mining front, First Quantum Minerals Ltd (TSX: FM, OTC: FQVMF), among companies covered in How They Rate, has perhaps the highest-risk, highest-reward approach to its foreign operations. Based in Vancouver, British Columbia, the company currently operates the Kansanshi copper and gold mine in Zambia and the Guelb Moghrein copper-gold mine in Mauritania.

Its project pipeline includes the Ravensthorpe nickel project in Australia, expected back on line this year; the Kevitsa nickel-copper-platinum group elements (PGE) project in Finland, on track for commercial production in mid-2012; and the Sentinel deposit in Zambia and the Haquira copper deposit in Peru, which are still under consideration for development. First Quantum also owns 16.9 percent of Mopani Copper Mines, operator of the Nkana underground copper mine and cobalt refinery and the Mufulira underground copper mine, smelter and copper refinery in Zambia.

First Quantum produced 323,017 tonnes of copper and 191,395 ounces of gold and generated revenues of CAD2.4 billion in 2010. While the stock price right now reflects growing global demand for copper, it’s also from time to time been crushed under the weight of political instability in some of the underdeveloped countries within which it’s tried to operate–chiefly the Democratic Republic of the Congo, which basically kicked the company out of the country.

These events took a 13.5 percent bite out of first-quarter 2011 copper production, though gold output was up 10 percent. The stock has recovered from the short-term hit it took following the production announcement, but volatility is a way of ownership with this one. It’s seen triple digits before, back in 2007, ironically, similar heights as it’s enjoying now. We rate it a hold at these levels, simply because of price and the fact that the dividend doesn’t provide enough comfort given the risks, which are, admittedly getting better, particularly in light of positive developments in increasingly important Namibia.