The Canadian dollar (or loonie') is on the slide. In the past year it has dropped by 10% against the US dollar, hitting a four-year low of C$1.10. This is partly down to weaker commodity demand.
Canada's wide range of raw materials, and emerging markets' voracious appetite for them, lifted the loonie from around US$0.62 in 2002 to US$1.10 in 2007. The currency also benefited from safe haven' demand, with central banks diversifying into the loonie as an alternative to US dollars and euros. But with Europe looking more stable, this prop has gone.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Finally, close links to the US normally mean Canada benefits from upswings there. But years of grappling with a strong currency have made Canada's manufacturers less competitive, shrinking the sector.
Oil transport bottlenecks also mean that Canada may benefit less from the US recovery than it has previously. It all suggests the loonie's slide will continue. Morgan Stanley sees the US dollar buying C$1.19 by the end of 2015.
-
Will UK inflation rise ahead of BoE meeting?August’s inflation report will be published at 7am on Wednesday, 17 September, one day before the Bank of England’s next rate-setting meeting
-
Thousands of savers with £250k pensions take cash over tax-free money and IHT fearsWith a record £70 billion withdrawn from pensions in the year to March, experts are concerned savers are making knee-jerk decisions without advice that could affect their long term wealth
