The Canadian dollar is living its worst nightmare currently. Its value has been depreciating day by day and has reached a record low which was last seen in 2004. There was a time when it used to be at par with the United States Dollar and now it is valued at about 76 cents. The big question is what led to this drastic change?
Web. 30 Sept. 2015. <https://postmediawindsorstar.files.wordpress.com/2014/01/loonie_20140109.jpg?w=630>.
There are a few reasons why I think the Canadian dollar is losing its value in the market. The first one being the fall in the demand of the Canadian exports such as oil and other commodities. The second reason could be the recovery of the U.S. economy. Lastly, the loonie’s value could also be influenced by the interest rate cuts introduced by the Bank of Canada.
Royal Bank Strategist Mark Chandler says, ‘ The weakness in oil prices is spilling over in a nasty fashion in Canada.
The falling value of the loonie has worried everyone in the country except for the manufacturers who expect to make money by exporting their goods for cheap. It may help them a bit because it will make importing Canadian goods cheaper but it would also lower their value in the market.
The tourism sector also expects to make easy money due to the inflow of the numerous American tourists coming across the border to have fun and relax while also staying in budget. Walking down Vancouver’s downtown on weekends these days, I see Americans everywhere. This is the only good thing that can happen with the dollar falling. But, the big picture still suggests that Canada is not having a good time right now which can be seen in the conversion chart below.
Web. 4 Oct. 2015. <https://chart.finance.yahoo.com/z?s=CADUSD=X&t=1y&q=l&l=off&z=m&a=v&p=s&lang=en-US®ion=US>.
On a personal note, I think that the falling value of the dollar is good for me because I being an international student save a lot of money while exchanging currency to pay my tuition or just for my own expenses. So in this situation this is the bright side for me.
So, What do you think?
References:
“Loonie Drops to Lowest Point in More than a Decade as Oil and Gold Buckle under Pressure.” Financial Post Loonie Drops to Lowest Point in More than a Decade as Oil and Gold Buckle Underpressure Comments. Web. 2 Oct. 2015.
“Falling Loonie Should Boost Windsor.” Windsor Star. Web. 2 Oct. 2015. http://blogs.windsorstar.com/news/falling-loonie-should-boost-windsor