Nov 14, 2024 (Baystreet.ca via COMTEX) --
The Canadian dollar continues to weaken against the American dollar after the U.S. election and is now trading at its lowest level in more than four years.
The loonie, as the Canadian dollar is known, is hovering around $0.70 U.S., and many analysts say the currency could fall further in coming months as Donald Trump returns to the White House.
The Canadian dollar is vulnerable in a new Trump administration, especially after the president-elect announced plans for a 10% across the board tariff regardless of trade agreements.
Should Canadians face higher tariffs on imported goods from the U.S., domestic prices will rise, the economy will weaken, and the Bank of Canada may be forced to raise interest rates.
Market analysts say the fear of blanket tariffs is likely to exert downward pressure on the Canadian dollar in coming months.
Another issue impacting the Canadian dollar is whether the Bank of Canada will lower interest rates by more than the U.S. Federal Reserve.
Data showed that inflation in the U.S. rose in October of this year and there are concerns that Trump's economic policies will spark inflation south of the border, requiring the U.S. central bank to halt its rate cuts.
Canada's economy is also slowing and underperforming the U.S. due to a combination of high consumer debt and weak business investment.
Some market analysts forecast that the loonie will fall another 2% to 3% by year's end.
COMTEX_459802453/2559/2024-11-14T10:12:39
