Canadian dollar rebounds from major devaluation

by / ⠀News / April 24, 2024
"Dollar Rebounds"

Canadian Dollar Bounces Back from Significant Devaluation

The Canadian dollar has experienced a robust comeback over four consecutive days, recovering from major devaluation that had led to its weakest point since November of last year. This remarkable resurgence has effectively wiped out the impact of the substantial devaluation, leading investors to cautiously monitor if this trend will offer further market stability.

Despite struggles from risk assets and oil prices, factors such as the recent Federal Budget announcement and a potential rebound in the housing market have helped bolster the Canadian dollar. A surge in job creation and tech innovations has also played a tremendous role in this recovery, giving evidence to the economy’s resilience and dynamism. Increased consumer confidence and robust corporate earnings have also been significant influencers.

Federal Budget and Housing Market Impact Canadian Dollar

The new Federal Budget includes an increase in capital gains taxes while proposed increases in corporate and windfall taxes did not pass.

Resurgence of Canadian dollar after devaluation

The business community has expressed some relief regarding these changes, which are believed to play a role in the Canadian dollar’s revival, with expectations of stimulating investment.

Amidst fears of a weak spring real estate market, recovery signs are evident in the housing sector. Indications suggest the market has bottomed out and is now rebounding. The increase in home sales and return of bidding wars are easing concerns of a potential market collapse.

Canadian Dollar Recovery & Future Expectations

Notwithstanding the positive signs, the Canadian dollar’s recovery has not been extraordinary. Predictions indicate that the Bank of Canada may cut interest rates further than the Federal Reserve, potentially leading to a long-term downturn. However, optimistic global economic conditions could protect the Canadian dollar from this plunge, making the purchase of the USD/CAD close to 1.36 a suggested prudent move.

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About The Author

Kimberly Zhang

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders.

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