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Canadian Dollar Holds Strong as Economy Nears Full Recovery

Posted Friday, April 30, 2021 by
Timothy St. John • 1 min read

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The Canadian dollar is currently sitting at 81 cents compared to the US dollar, making a grand recovery compared to where it was just a couple weeks ago.

On March 18, the Canadian loonie had dipped to $0.70, an incredible low that was a result of a struggling economy. Now, the Canadian economy is steadily recovering and seeing an 11-month straight gain in gross domestic product.

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In February, the GDP grew 0.4%, with early estimates for March showing a 0.9% increase in GDP. That 11-month streak is great news for the Canadian economy as well as the Canadian dollar and places the overall economic output to nearly pre-coronavirus levels.

Economists expect that the output for the country should return to the level was before the pandemic by about the second half of the year. Continued positive economic gains are being attributed to an extensive vaccination rollout as well as helpful moves by the Bank of Canada relating to bond purchases and interest rates.

The Canadian dollar continues to improve at a rate that is outpacing the US dollar, as both economies work to reopen and reach the levels previously seen before the pandemic. Retailers are leading economic gains in Canada, with that sector showing a 4.5% increase for the entire month. Some industries that were experiencing the hardest hits from restrictions and lockdowns have started to show improvement as well, particularly as restrictions started to lift throughout the month of March.

Canada’s GDP is very close to pre pandemic levels, with a difference of about 1.5% currently.

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