World Economy

Canada Deficit Widens

Canada Deficit WidensCanada Deficit Widens

The Canadian dollar has been the biggest loser against the US dollar; over the month of December the loonie fell 2.43% against the greenback, FXStreet reported. USD/CAD spiked to 1.37, the highest level since June 2004. “We expect the loonie to remain under selling pressure against the backdrop of falling crude oil prices and an upcoming rate hike by the Federal Reserve,” said Prime Minister Justin Trudeau. Moreover, he has promised to run modest deficit to kickstart the economy. Finance Minister Morneau said the country will most likely run a wider deficit, which would reach CAD 3 billion in the next fiscal year (starting in March), as the economy struggles in a low commodity price environment. USD/CAD is taking a breather around 1.36 but expect CAD to continue to depreciate versus the US dollar; the next resistance stands at 1.40 (high from May 21).