The Canadian dollar has hit multi-year lows against the US dollar, trading at 71.29 cents USD on Thursday, down from 71.53 cents USD the previous day. The currency’s downward trend has accelerated following Donald Trump’s election victory on November 5, 2024.
Current Exchange Rate Trends:
- November 14, 2024: 71.29 cents USD
- May 2021: 83 cents USD (comparison high)
- 52-Week High: Nearly 76 cents USD
Katherine Judge, Director and Senior Economist at CIBC Capital Markets, highlighted the economic uncertainty surrounding Trump’s trade policies as a key factor for the loonie’s weakness. She also pointed to the widening gap between the US Federal Reserve’s interest rate and the Bank of Canada’s overnight rate as contributing to the downward trajectory.
CIBC’s updated foreign exchange rate forecast predicts the Canadian dollar will remain in the 0.71 to 0.73 range against the USD through December 2026, reflecting continued pressure on the loonie.
While the Canadian dollar struggles against the USD, it has gained some ground against the Euro and Pound Sterling, which have experienced steeper declines relative to the USD since November 5.
The declining loonie presents challenges for Canadian exporters and businesses reliant on imports, as the cost of US goods and services increases. Conversely, the weaker Canadian dollar may boost sectors like tourism and domestic manufacturing by making Canadian goods and services more competitive internationally.
Economic experts anticipate further challenges for the Canadian dollar, with continued volatility tied to US economic policy and global financial markets. Policymakers and businesses will need to navigate these uncertainties carefully to mitigate potential economic impacts.