The Canadian Dollar is forecast to fall over the coming weeks after an economist famous for being bearish and who’s nicknamed ‘Dr.Doom’ called for the Bank of Canada to weaken the currency further in order to support the Canadian economy.
Nouriel Roubini said at a meeting of the Economic Club of Canada in Toronto yesterday that he believes that the ‘Loonie’ should be 10% lower than current levels.
He said that he believes that the Canadian currency is too high and should fall in order to keep the nation’s manufacturing sector intact.
“The Canadian economy is doing okay, but not exceptionally. While growth of 2.3% or 2.4% is expected this year and will go a bit higher next year, there are challenges. Commodity prices are expected to decline, and the high Dollar is crowding out manufacturing. I would use more aggressive monetary policies to weaken the currency. If your currency was 10 per cent weaker that would help manufacturing and it will not cause a significant amount of inflation, which is currently well below the target. The risk of doing that is relatively modest. … Keeping your currency weaker right now is important,” Mr Roubini said in his speech.
Following his speech the ‘Loonie’ weakened against the Pound and US Dollar.
Sterling could push higher against the ‘Loonie’ later in today’s session if today’s mortgage approval data comes in as expected and shows that the number of approvals rose to its best level in more than six years last month.
With a lack of domestic Canadian data due for release today the currency will be at the mercy of international factors.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5420 ,
Canadian Dollar,,US Dollar,0.9038 ,
Canadian Dollar,,Euro,0.6568 ,
Canadian Dollar,,Australian Dollar,1.0028 ,
Canadian Dollar,,New Zealand Dollar,1.0855 ,
US Dollar,,Canadian Dollar,1.1065 ,
Pound Sterling,,Canadian Dollar,1.8454 ,
Euro,,Canadian Dollar,1.5218 ,
[/table]
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