Canada Could Already Be In Recession, Dollar Could Fall To 62 U.S. Cents

More bad news for Canada’s economy.

While the Canadian Dollar is currently around 75 U.S. cents, it could have a long way yet to fall.

That’s according to David Wolf from Fidelity Investments.

As reported by BNN Bloomberg, “A 17 per cent drop from current levels of around 75 U.S. cents may sound like a lot but the currency has already fallen about 30 per cent from above par in 2011 when Canada’s economic stars were aligned, said the Toronto-based portfolio manager. Back then, the country was revving up from the financial crisis and oil was over US$100 a barrel. Now, the nation may already be in recession after growing at an annualized pace of just 0.4 per cent in the fourth quarter and a pretty “soggy” start to the year, said Wolf, part of the asset allocation team at Fidelity Investments Canada, which manages about $136 billion. He stressed his views were his own, not the firm’s.”

His colleague David Tulk also raised concerns:

“It may not meet that technical definition, but it could very well feel like a recession for a big part of the economy.”

“You’ve never had debt levels as high, relative to incomes in Canada,” said Tulk. Even if the Bank of Canada has stopped raising rates, “there’s still kind of a big bulge in the python, so to speak, in terms of prior increases in interest rates and prior actions.”

These warnings come as the Trudeau government is about to release their latest budget, which will be a desperate effort to distract from their failed economic record.

Spencer Fernando

Photo – YouTube