Winnipeg — The loonie’s weaker trend will likely stick around a while, says one economist.
Weak Canadian economic data and market talk about a Bank of Canada rate cut were on the forefront of the dollar’s outlook Monday.
Andrew Pyle, senior wealth advisor at ScotiaMcLeod, says a string of negative Canadian economic reports have contributed to a weaker loonie.
He says there has been a shift in market speculation toward a technical recession in Canada.
“Implications of that is the chance that the Bank of Canada would have to resort to yet another rate cut this year,” Pyle said.
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Pyle thinks the loonie will retest the US78 cent level that it reached in early February and again in March.
“Obviously the problem with that is markets tend to move more so we have the potential for the currency to move below that level,” he said.
At noon on Monday the loonie was at C$1.26, or US79 cents, and was predominantly guided by weaker oil prices.
