Canadian FinMin Says Currency to Weaken Further Amid Soft Commodity Prices

Canada’s weakening currency will probably face further pressure from persistently low commodity prices that also complicate the country’s fiscal situation, the nation’s finance minister said on Monday.

“Commodity prices are softening, affecting our terms of trade and making important inputs – so vital for our manufacturing sector – more expensive,” Bill Morneau said in his first public speech since being named to head the finance portfolio after the Liberal government’s election victory in October.

Morneau said he was encouraged by a recent uptick in the U.S. economy, but China and Europe were causes for concern.

“Going forward, it is very likely that global economic conditions will remain unfavorable and that subdued commodity prices will persist,” he said. “This of course has important implications for the currency and our fiscal situation.”

The Liberals campaigned on a platform to run budget deficits of up to C$10 billion ($7.3 billion) a year in order to spend on infrastructure to boost growth after the economy fell into a modest recession in the first half of the year.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.