The dollar is struggling, putting a premium on whatever People buy that comes with a value tag in U. S. money. Professionals say there are some steps consumers, investors, and travelers can take to lessen the financial strain of a poor dollar and perhaps even advance as the American dollar languishes around 69.5 cents US, which is close to its four-year low. In the last year, the value of the American dollar has dropped by about five cents in comparison to that of the U.S. 2: 39
Business News: Loonie drops below 70 percent U. S. There are a number of compound grounds for the loonie’s problems, from a growing gap in coverage rates between central bankers on either part of the Canada-U. S. borders to worries of president-elect Donald Trump’s affected taxes and other political upheaval. The exchange rate is still uncertain in 2025, according to researchers who spoke to Global News, but projections for a second-half economic recovery may help. According to Shannon Terrell, head writer and spokesperson for NerdWallet Canada,” the name of the game for Canadians right now is to know what they can do to protect their finances and how to actually possibly take advantage of the current environment.” According to Terrell, there are a few apparent areas where users will notice their loonies lose buying power. That includes anyone who purchases goods from U.S. sellers online and who travels west this time. Supermarkets, also, may be contending with the weaker change level when they’re buying food from U. S. providers. ” Everything that we are bringing in from the U. S. essentially is going to be more expensive, primarily technology, clothes and alas, food”, Terrell explains. Consumers looking to save money in the interim should look domestically, Terrell advises.” So we may see that impact on our already bloated grocery bills. That includes checking the label of products at the grocery store to see if they were grown closer to home, and taking a trip to Canada this year where possible. 5: 41
Higher food prices in 2025: What does this mean for Canadians? Terrell suggests a few workarounds for those who are traveling abroad in 2025 or who shop frequently in the United States. Some credit cards will waive foreign transaction fees, which Terrell says can otherwise account for 2 % to 3 percent of the purchase price of goods sold in U.S. dollars. One of these credit cards may not necessarily close the gap between the Canadian and American dollars, but it may help you save money on fees, which she claims could change the game for the better. According to her, opening a U.S. dollar-denominated bank account can help to lower conversion fees on purchases, making it a wise decision for anyone who regularly shop or travels south of the border. Terrell suggests that the relative value of credit card benefits and other travel points can also play a role in making up the lost ground because the Canadian dollar is not going as far as it does. Check the fine print of your credit card agreement, she advises, and look for discounts on car rentals, accommodation and flights that might come free with certain products. Trending Now
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Allan Small, a senior investment advisor for iA Private Wealth, tells Global News that the weak loonie poses a challenge for Canadian investors when it comes to getting exposure to high-growth U.S. stocks. ” Your Canadian dollar doesn’t go nearly as far as it once did”, he says. ” However, I’m still going to tell you that you need to be invested abroad. You must be invested in the United States. Small notes that Canadians don’t necessarily need to see the loonie increase in value to receive a solid return on U.S. investments. That is where the growth has been. The return should be steady when it comes to foreign exchange rates, ideally between the Canadian and U.S. dollars when an asset is both purchased and sold, keeping the gap at least uniform. However, Small contends that the investment has probably grown enough to cover any losses when cashing out, even if the loonie’s value has decreased by a few percentage points in comparison to the US dollar. 1: 37
How Loonie dropping below 70 cents U. S. could impact Canadian finances” What we want more so than anything is a stable dollar. It doesn’t have to run out. It just has to be stable”, Small says. Depending on where they conduct the bulk of their business, the Canadian dollar can be a boon or a drag in terms of company-specific outlooks. According to Terrell, some Canadian industries could experience a boost as a result of the country’s weak economy, particularly tourism, as tourists from other countries ‘ economies see their money swell even further in Canada than before. While Canadian businesses purchasing from the U.S. will suffer a more severe blow to their bottom line as a weaker loonie, those selling abroad could experience a rise in demand as a stronger U.S. dollar puts Canadian exports essentially on discount. According to Small,” It just depends on which side of the coin you are currently on.” Small anticipates a slowdown in the loonie’s decline in the upcoming months as the Canadian economy recovers and economists anticipate a return to growth, in part as a result of the Bank of Canada’s earlier interest rate reductions. Those forecasts remain cloudy, however, as the prospect of incoming U. S. president Trump’s threatened tariffs loom large over Canada. Terrell advises using the upcoming months to stress test your budget by strengthening an emergency fund, re-examining spending habits, and checking in on investment portfolios rather than making sharp swings in response to speculation. In the end, the goal is to be flexible enough to take advantage of any opportunities as they arise while surviving these various economic scenarios.
