2015-07 The dollar is falling

On Tuesday, the Canadian dollar exchange rate in terms of the US dollar fell to the lowest level since 2004. This article discusses why, and what the consequences are:

Why?

• Resource prices are falling
• The Canadian economy is weak and the Bank of Canada is unlikely to raise interest rates in the near future

Consequences: the depreciation of the dollar

• cushions the blow to the economies of the oil-producing provinces
• leads to higher exports
• leads to the improvement to the tourism balance
• the economy will adjust from commodity-led growth to export-led growth

What is not mentioned is that some prices of imported products in Canada have been increasing. But inflation is not increasing significantly