The Canadian dollar has fallen to its lowest level in nearly two decades, raising concerns about the impact on Canadian businesses and investors. Trade tensions with the U.S. are a major factor, as are worries about the overall health of the Canadian economy. While some sectors, like gold miners, may benefit from a weaker loonie, others, such as energy companies, face significant headwinds.
You have to go back to 2003 to find a lower low than the one the Canadian dollar touched last week of 68.7 US cents, on an intraday basis.
Canadian investors might reacquaint themselves with a depressed loonie reality. The Canadian economy is in trouble. And tariff brinksmanship is set to consume us all again in a few weeks, if not indefinitely.“Investment and sentiment levels in Canada have taken a severe hit,” Karl Schamotta, chief market strategist at Corpay, a foreign exchange and payments company, said in a note. Currency traders are positioned for more downside, he added.
The TSX is cushioned somewhat from domestic mayhem by its strength in natural resources, which align it more with global forces. Over that time, the loonie has declined from a peak of around US$1.06 to the lowly 70 US cent mark we find it at today. The flip side of that currency effect is that new money invested doesn’t go nearly as far as it once did in the U.S. stock market. There’s no getting around this. For some, it may shift the calculus when it comes to committing additional money to U.S. equities.Beneath the Canadian stock market’s calm surface, great changes are afoot. Trade-exposed names have been clobbered, such as MDA Space Ltd.
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