“At the very least, the BoC risks sounding quite ‘dovish’ next month if it acknowledges that growth has not met expectations (which will make 2016’s optimistic objectives harder to reach),” Osborne said. “Even if our base case proves correct and the BoC remains on hold, it will be a long time before Canadian rates rise.”
I believe that while the weakened Canadian dollar hurts the purchasing power of Canadians, it benefits people in the export business. For example, Hitatchi ID creates software and hardware for identity management. Due to the drop of the Canadian dollar, Hitatchi ID is doing particularly well. My belief is that many manufacturing companies out east will do well thanks to the weak Canadian dollar. The drop in the Canadian dollar also attracts tourism since other countries have greater buying power for the Canadian currency.
The Canadian economy could slip for a while, but this is to be expected of the economy in all countries. Canada has a reputation for being very solid and financially stable. So even if it goes through bad financial times it will bounce back -- whether it is tomorrow, next month, or necxt year.
One of the most devastating events that led up to the 1920s Stock market crash is that paper money in the United States became virtually worthless. This occurred when paper money was being printed, but there was no gold in the United States Treasury to account for the paper money. In Canada, the plummeting of the value of the dollar is a similar indication of economic turmoil. It may mean they are about to enter a recession.
The Canadian dollar plummeting is not a sign of bigger problems for the country because of natural fluctuation of currency. Strong countries may have times where their currency is worth less to other countries, but that does not mean the whole country is at jeopardy. Economies naturally go through periods of recession and inflation; eventually the Canadian dollar will gain in value, so a decrease in worth is not something to worry about.