May 12, 2017
Is the Loonie Headed For a Major Crash?
It’s been a rough year for our dollar and new reports suggest it won’t be getting better anytime soon. Last week, the loonie hit its lowest point in 14 months, and while it recovered slightly, analysts predict it’ll hit a new low in the next few weeks. Thanks to crude oil prices (and a few trade conflicts with Trump’s administration) investors have already unloaded $22.5-billion of Canadian oil sands assets this year, and it probably won’t end there. Speculators are betting against Canada, blaming our weak dollar, NAFTA’s uncertain future, a potential housing bubble burst, and our central bank’s overly conservative economic policy. Financial Post
Why You Should Care
There are a lot of reasons to care if our dollar tanks, but how that kind of dip will affect our economy is probably at the top. A weak dollar could hurt employment, trade and real estate—three areas that are critical to Canadians’ quality of life, their financial future and our national stability. On the flip side, a low loonie could attract more tourists to the Great White North, along with film and television productions who’d want to take advantage of the low cost of shooting here. On top of all that, it can also boost exports for Canadian manufacturers. So it’s not all bad, but it’s not all good. Let’s just call it complicated.
The loonie may be headed for another tumble as investors turn their nose up at our currency, export industries and our economic policies.