Canadian Dollar Hits New Low Scramble Downside Protection 2024 12 18
Canadian Loonie Hits 4-Year Low Amid Political Crisis
Image copyright: Brent Lewin/Contributor/Bloomberg via Getty Images
The Facts
The Canadian dollar this week fell to its lowest level since March 2020, dropping below 70 cents US, as political uncertainty and economic challenges continued to mount.
Finance Minister Chrystia Freeland's resignation earlier this week — prompted by opposition to Prime Minister Justin Trudeau's spending measures — has intensified a political crisis and market uncertainty.
The Spin
Narrative A
There's no telling if new border security measures being announced by the Canadian federal government and the provinces will placate Trump. That means other measures must be taken to get the Canadian economy some wins or the loonie could drop further and maybe even hit a record low.
Narrative B
Those who've been bearish on the Canadian economy have reasons to reverse their outlook. Trump's demands may now be placated and the Bank of Canada is confidently orchestrating a go-slow approach to interest rates. A more business-friendly government should also be on the horizon.
Metaculus Prediction
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