Canada

Canadian Dollar Hits 14-Month Low

Is the Canadian dollar in freefall with no floor in sight or is the Bank of Canada right to hold rates steady?

Published 11 hours ago

Story

Above: The Bank of Canada in downtown Ottawa, Canada, on March 12, 2025. Image credit: Artur Widak/NurPhoto/Getty Images

The Spin

Government-critical narrative

The Canadian dollar is in serious trouble, hitting 14-month lows as the Fed signals rate hikes while the Bank of Canada sits on its hands at 2.25%. A technical recession, falling oil prices and a weakening consumer are hammering the loonie from every direction. With the U.S.-Canada yield spread widening and USMCA uncertainty looming, there's no floor in sight for Canada's currency.

Financial Post InvestingLive

Pro-government narrative

The Bank of Canada is right to hold rates steady and let the loonie absorb the pressure from Fed tightening. Underlying inflation is soft, the economy is weak and a negative output gap means demand isn't driving prices up. A weaker Canadian dollar doesn't historically spark serious inflation, so there's no compelling reason to hike rates just because the Fed does.

Bloomberg