The loonie took a beating alongside stocks last week, falling 7.77 cents or 8.4 per cent this past week, and 2.59 cents alone on Friday. The loonie has now dipped below 90 cents against the U.S. greenback. The silver lining is that non-resource manufacturers will likely benefit from this drop because their main customers tend to be in the US.
Canada is a country with various regional economies, each which have a unique boom-bust cycles. This acts as a natural hedge against tough economic times. When the Canadian dollar is low, non-resource manufacturing prospers. However, the competitiveness squeeze caused by the high dollar and the huge and growing trade deficit with Asia has resulted in the loss of some 250,000 manufacturing jobs since the peak in 2002.
