Canada: The loonie will continue to weaken – RBC Economics

Canada will experience a technical recession in 2020, as economic activity contracts in the second and third quarters of the year, according to Craig Wright from the Royal Bank of Canada. 

Key quotes 

“We’ve made significant downward revisions to our fore-cast and now look for real GDP to increase at a modest 0.8% pace in Q1 followed by two quarterly declines of 2.5% and 0.8% in Q2 and Q3 respectively.”

“We expect the bank will increase policy support at upcoming meetings and forecast the overnight rate will fall to match the  record low of 0.25%.”

“We see further downside for Canada’s dollar in the current anxiety-ridden environment and the persistence of low oil prices and are forecasting the currency will continue to weaken into mid-year before recovering modestly.”