TORONTO — The Canadian dollar is trading at its lowest level since 2003 on the eve of sweeping tariffs from the United States.
The loonie plunged to 68.62 cents US as of midday Monday.
Karl Schamotta, chief market strategist at Corpay, says the loonie could see a further decline of two to three per cent if an agreement isn't reached in the coming weeks, and risks falling even lower if markets predict the tariffs will be in place for a prolonged period of time.
Schamotta says a declining exchange rate is a telltale sign the economy is in trouble and long-term tariffs would drive Canada into a recession.
He says a weaker loonie could push prices higher for everything from groceries to products bought on Amazon as well as vacations.
But Schamotta says there's a silver lining — a weaker dollar could help offset the cost of tariffs for buyers around the world purchasing Canada-made goods.
This report by The Canadian Press was first published Feb. 3, 2025.
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The Canadian Press
