Everybody seems so bullish on the Canadian dollar, as it sits around 76 cents U.S., and the happy crowd on Bay Street are crowing about how well the country is handling the pandemic (true), howmuch better the economy north of the border is faring (overstated) and the wonderful job Ottawa has done on the fiscal front (seriously, all it’s been is a case of throwing spaghetti against the wall and seeing what sticks).
The move in the loonie has zero to do with anything Canada. It is 100 per cent about the broad weakening in the greenback. Proof? Over the past two weeks, there has been precious little change in the Canadian dollar index excluding the U.S. dollar, and it’s actually a tad weaker than it was a week ago.
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But one thing that might help the country’s economy, amidst the border closures and travel restrictions due to COVID-19, is the real potential to see a new “Buy Canadian” theme emerge among Canadian consumers. Whether it’s opting for a “staycation” at home or touring domestically, buying Canadian-made goods or local produce, this short-term shift in consumer preferences could potentially end up helping out GDP growth to some extent. After all, household expenditures represent 56 per cent of GDP — not a small share of the pie.