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Will The Canadian Dollar Continue To Weaken?


Guest Sam Bouman

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Guest Sam Bouman

The Canadian dollar is continuing to show weakness against the USD, one of the reasons for this may be Canada’s need to stimulate their export market due to the fact that there is currently low consumer spending and high household debt.

If we look at oil it currently seems as though the CAD and oil prices are not as tightly correlated as previous times and although the recent drop in oil has had an affect on the CAD there are other factors surrounding the decline in the value.

The main reasons for the lack of strength in the CAD are that mortgage and consumer debts remain high and consumer spending growth has slowed significantly. This means Canada has become more reliant on exports and in order for their export market to remain attractive there’s a need to keep the CAD weaker then before.

So as long as household debt remains high in Canada we can expect to see a weaker CAD.

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