The Canadian Dollar is trading at its lowest since the recession. For the past few days it’s been hovering under the 80 cent mark. Some say the outlook for our economy is dim, but this could be a good thing.
London Economic Development Corporation director Robert Collins says a lower dollar is better for Canadian business. “It’s fantastic for our manufacturing area which is about 11% of the London economy or close to 28 000 workers. It’s also very good to attract tourism.”
International tourism usually surges with a low dollar because it is cheaper to visit countries with lower exchange rates. Collins notes that Canadians planning to travel outside the country should expect a more expensive visit.
The dollar and oil prices
The low dollar also has a relation to our low oil prices. “Canada is a significant oil producer and an oil seller so when the price of oil comes down, Canada is seen, by some, as being less attractive for further oil investment.” Lower oil prices could mean less confidence in the overall economy.
TD Bank predicts that a 75 cent loonie is looming due to continuing weakness in oil prices.
Collins said there are many factors that determine the value of the dollar which makes it hard to tell how long it will be trading this low.
“Whether or not it be [due to] the price of oil, which is set by OPEC and world supply, it’s also set by the performance of the Canadian economy in relationship of other economies, I wouldn’t want to speculate on how long that is going to last.”
