Articles

Canadian MoneySaver asked me to write an article on the outlook for the Canadian dollar. I do feel there are some encouraging positives for the Loonie that could see our currency rise in the near term. However, while I am bearish on the U.S. dollar versus global currencies, it is my opinion that the Canadian dollar will continue its relative weakness against both global and U.S. currencies in the longer term. Please don’t get me wrong. The longer-term downside influences on our dollar that I present below could very well change positively. We must be cognisant of the current conditions, while allowing new data to change our outlook in the future. This article covers the fundamental and technical evidence behind my near-term optimism on the Loonie. It also covers my longer-term caution on our dollar. At the end of the article, I present some strategies for investors to hedge against the potential of a longer-term falling Loonie.

Inflation is the year-over-year price increase of an item or service compared to last year. To calculate the overall inflation rate in the Canadian economy, Statistics Canada measures the price changes of a basket of goods and services typically consumed by Canadians.