Canada's economic recovery is tied to the U.S. economy

According to observers, Canada's economy is facing a period of instability, under the pressure of a series of factors: a complicated epidemic of acute respiratory infections COVID-19, the Prime Minister's government. Justin Trudeau is in a minority position in the Canadian Parliament, the energy industry is "suffocated" and the election is difficult to predict in the US. Canada's economic recovery is believed to be tied to the US - Canada's largest trading partner. No matter which party will run the government in America, the success of the US economy is of vital importance to the Land of Maple.

Bank of Canada Governor Tiff Macklem has confirmed that the recovery of Canadian exports will depend on the recovery of the US economy. Canada and the US share the longest border in the world (8,900km). According to statistics, before the COVID-19 pandemic, every day, a volume of goods worth about 2.7 billion CAD crosses the Canada-US border. According to foreign exchange strategists, Canadian local currency CAD is expected to extend its rally against the dollar next year, if the impact of the COVID-19 crisis on the global economy subsides. Democrats, if they win the US election will also be a factor driving the bullish outlook of the CAD.

Since last March until now, CAD has appreciated nearly 11% against the dollar. However, this momentum has slowed down over the past two months, amid a strong resurgence of the COVID-19 epidemic, and investor sentiment was heavily affected when the US delayed the bailout package during the pandemic. According to some analysts, Joe Biden's victory (if it happens) will mean a large bailout will be approved, creating a favorable environment for risky assets and will put pressure on the dollar.

Survey results of more than 30 currency strategists showed that the CAD in the next 3 months is likely to inch up to 1.32 CAD / USD, compared to 1,323 CAD / USD in the last 2/11 session. Canada is a major producer of many commodities, including oil. Therefore, the CAD tends to be sensitive to the prospects of the global economy.

In recent weeks, the world economy faces uncertain prospects as a number of countries, including Canada, re-impose measures to curb the spread of the SARS-CoV-2 virus that causes the epidemic. COVID-19. Economist Hendrix Vachon forecasts the CAD will remain hovering around 1.33 CAD / USD in the next few months.

#Canada #NorthAmerica #IE #Covid19

References

- Hoạt động thương mại quốc tế của Canada có xu hướng đình trệ | Kinh doanh | Vietnam+ (VietnamPlus). (2020). Retrieved from URL:

https://www.vietnamplus.vn/hoat-dong-thuong-mai-quoc-te-cua-canada-co-xu-huong-dinh-tre/667871.vnp

- Kinh tế Canada cần ít nhất nửa năm để khởi động lại một cách an toàn | Kinh tế | Vietnam+ (VietnamPlus). (2020). Retrieved from URL:

https://www.vietnamplus.vn/kinh-te-canada-can-it-nhat-nua-nam-de-khoi-dong-lai-mot-cach-an-toan/644273.vnp

- Kinh tế Canada đã rơi vào suy thoái do sức tàn phá của COVID-19 | Kinh tế | Vietnam+ (VietnamPlus). (2020). Retrieved from URL:

https://www.vietnamplus.vn/kinh-te-canada-da-roi-vao-suy-thoai-do-suc-tan-pha-cua-covid19/637947.vnp

Tran Phuong Thao