The Canadian dollar is still falling!
According to reports: This week, the Canadian dollar fell to 70 cents against the U.S. dollar, its lowest point in nearly five years. The Canadian dollar also fell to 70 cents in February 2020, before the attack on Canada.
A weak Canadian dollar means many of the goods we buy - especially fresh fruit and vegetables imported in the winter - are going to cost more. After three years of soaring prices due to inflation, Canadians are once again in the red.
In addition, Canada's economic performance is far worse than that of the United States, which is also a reason for the weakness of the Canadian dollar. What's more frightening is that the US economy may be boosted by Trump's election as president, which may cause Canada's economy to lag further behind.
Trump's election sends Canadian dollar to more than 4-year low against U.S. dollar
Trump's re-election has helped the dollar strengthen sharply, with the Canadian dollar falling to a more than four-year low against the greenback, which could help Canadian exporters cushion the impact of tariffs but will also make imported goods more expensive.
The Canadian dollar has fallen about 2 percent against the U.S. dollar since Trump’s election and about 4 percent since September, when financial markets began anticipating his return to the White House, sparking the so-called “Trump trade.”
The Canadian dollar is trading near 71 cents U.S., down from 74 cents in late summer, with recent moves largely reflecting the strength of the U.S. dollar.
The weaker Canadian dollar also reflects the weakness of the Canadian economy, which has led investors to turn their attention to the US market and prompted the Bank of Canada to cut interest rates faster than the Federal Reserve to avoid a recession. This interest rate gap is expected to widen further, which is good for exporters (because their products become more competitive), but bad for Canadian consumers because the price of cross-border goods will increase.
Bay Street analysts generally expect the U.S. dollar to continue to strengthen in the short term, while the Canadian dollar will fall.
Global bond and currency markets have been boosted in recent months by the return of Trump to the White House. The data dampened market expectations for quick rate cuts from the Federal Reserve.
Trump has pledged to implement a number of policies, including tariffs, corporate tax cuts and deregulation, which are expected to boost domestic economic growth, increase the U.S. government deficit and push up inflation.
