Canada’s dollar continues to slide lower vis-à-vis the rival U.S. currency.
The Canadian dollar, known as the loonie, has steadily fallen in June, dropping to the 70 cent U.S. mark. As recently as May, the Canadian currency was trading at 74 cents U.S.
Economists blame the erosion of the loonie on a combination of weak economic growth in Canada and a strengthening U.S. dollar coming out of the Iran war.
However, Canada isn’t alone. The U.S. dollar has been surging ahead of other foreign currencies in recent weeks, including the euro and Japanese yen.
Analysts say that the artificial intelligence (A.I.) boom in the U.S. is attracting more investment to America as companies post higher profits and the economy performs better than expected.
The Bank of Canada is expected to hold interest rates at current levels for the remainder of this year, while investors are expecting rate increases from the U.S. Federal Reserve.
The interest rate differential between the two countries is expected to continue drawing capital out of Canada and into the U.S., pushing the loonie down as the U.S. dollar rises.
The Bank of Canada next decides on interest rates July 15.
