Since we started this program in December 2017, we have encouraged investors to stay in the American dollar. Most investors today want to do exactly that.
The strength or weakness of the Canadian dollar (CAD) depends on various economic and geopolitical factors. Here are some key reasons the CAD might be weak:
- Oil Prices: Canada is a major oil exporter, so the CAD often moves in tandem with crude oil prices. A drop in oil prices weakens the CAD.
- Interest Rates: If the Bank of Canada has lower interest rates than the U.S. Federal Reserve, it can make the CAD less attractive to investors.
- Trade Imbalances: A trade deficit (when imports exceed exports) can weaken the currency.
- Economic Performance: If Canada’s economy is underperforming compared to other major economies, it can lead to a weaker CAD.
- Global Risk Sentiment: During periods of global uncertainty, investors often move to “safe-haven” currencies like the U.S. dollar, which can weaken the CAD.
- Exchange Rate Trends: Currency values can also be influenced by speculation and long-term trends in the forex market.
Over the last 50 years, the Canadian dollar has been stronger than the US dollar only for two short periods. Stay away from it.
