Chart: The Loonie’s Descent in Pictures
As the chart here clearly shows, this was an exceptionally bad year for the Canadian currency.
Trading today around 71.7 cents US, the March loonie was up around 85.4 cents at the same time a year earlier, meaning the dollar has shed more than 13 ½ cents or 16% in the last 12 months. According to reports, that’s the worst annual performance by the loonie since 2008, when the financial crisis sent it down by more than 18%.
Heading into the New Year, a couple of main factors are expected to continue to conspire against the loonie, namely low oil prices and the relative weakness in the Canadian economy versus the U.S. The fact the U.S. Federal Reserve actually raised its benchmark interest rate last week – while the Bank of Canada has already cut rates twice this year- also remains a bearish influence.
It is interesting to note that if the Canadian dollar suffers through another year as bad as this, it would be down around 58 or 59 cents US by this time in 2016.
March Canadian dollar: source - Barchart
Source: DePutter Publishing Ltd.
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