The Canadian dollar has declined about 11 per cent to the greenback this year. Photo by REUTERS/Mark Blinch
Financial Times: Posthaste: Why the loonie could sink to 70 cents before the dust settles
Average Canadian borrower can expect to spend an extra $2,500 a year just on debt
When the going gets tough, the American dollar gets going.
That’s the way it’s been for ages — when markets get rocky and there are few places to hide, like now, the U.S. dollar is the port in the storm investors turn to.
For example, in the depths of the financial crisis, the greenback gained 23 per cent; during the global pandemic it was up 10 per cent. Now as the global economy grapples with searing inflation and pending downturn, the U.S. dollar is once again standing strong, up 16 per cent since the summer of 2021, say TD economists Beata Caranci and James Orlando in a recent report.
Among the developed nation currencies that have depreciated against the U.S. dollar, the loonie has held up pretty well, say the economists.
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WNU editor: I live in Canada, and what I see is 30% of the country doing well, and the rest are struggling. High debt levels, high energy prices, and inflation is impacting many Canadians, and they are having trouble to make ends meet. And the consensus is that things are going to get worse.
The Canadian Deputy Prime Minister who is also the country's finance minister has a solution. Cancel your subscription to Disney+ (link here). Yeah. She actually said that.