The Bank of Canada is hoping the diverging interest rate will spur investment but it could take a few years to stabilize, which is affecting some of the economic outlooks.
Economists predict a "perfect storm" of negative factors will continue to weaken the Canadian dollar in 2025. Key reasons for this include: * Uncertainty surrounding potential US tariffs: Threats from the Trump administration to impose tariffs on Canadian goods could lead to economic disruption and downward pressure on the loonie. * Ongoing global economic uncertainty: Unstable global markets and concerns about a potential recession further contribute to the weak outlook for the Canadian dollar. While a weaker loonie can benefit Canadian exporters, the overall negative impact of these factors is expected to outweigh any potential gains.
