Canadian Dollar Falls Again

11 July 2012 12:00 - Lucy Williams

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Canadian Dollar Falls Again


Canada’s currency has once again weakened against the US dollar to a new low of C$1.0226, a drop of 0.3 percent. This comes as worrying news as reports of Canada’s crude oil exports plunge 18 percent due to China curtailing its import of the raw material, pushing crude oil prices even lower. It has been speculated that the ‘loonie’ is being increasingly governed by the success of the crude oil prices and the fluctuations experienced with prices and growth of exports. As a result of the decrease in crude oil value, which fell below $84 per barrel, combined with US stocks falling for a fifth day, the fall of the Canadian dollar was inevitable.

In terms of the eurozone, the Canadian dollar has advanced 0.2 percent against the euro, almost reaching a record high. The economic crisis being experienced across Europe was expected to weaken global growth, both financially and for the import/export business meaning the demand for raw materials, such as Canada’s crude oil, would lessen. The weak state of the euro has been crucial for affecting global economic recovery; however the Canadian dollar appears to be advancing against the euro showing a two-year high. Optimism for Europe’s recovery has waned making economic recovery a continual struggle.

Economists predict that a 2.1 percent growth in the Canadian economy will be seen this year. This is still a positive outcome for 2012 however this statistic is a decline in economic growth shown in previous years, as 2010 showed a 3.2 percent growth in the economy. Other reports showed a disheartening statistic for Canada in which US economic growth this year tops that of Canada’s at 2.2 percent, for the first time in seven years. However this news was received well in the US as economic growth continues.

Economic data concerning housing, released by Canada Mortgage & Housing Corporation, shows economic expansion with a rise in housing starts for June. A change in Canada’s mortgage rules have so far been beneficial to the Canadian economy, the revised mortgage rules include a shorter length of government-insured mortgages.

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Related Files:
• Canada Mortgage & Housing Corporation
Official Website

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