Canadian dollar declines in value after fall in oil prices

Compared to the American dollar, the Canadian dollar has fallen by 0.2 percent. This comes in the wake of significant inflation and a 0.7 percent fall in oil prices.

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Oil remains one of Canada's chief exports. When oil prices fall, the Canadian economy suffers, particularly in Western Canada.

Canada's inflation stands at 4.7 percent, with the Bank of Canada governor warning that it could reach 5 percent in 2022. Despite this, the Trudeau government has committed to spend billions more.

Investors now expect the Bank of Canada to raise interest rates in an effort to combat inflation. This, however, could also have a serious, adverse effect on the Canadian economy.

"The market is already priced pretty aggressively for the Bank of Canada next year," said one economist. "So we haven't seen much of a reaction in USD-CAD because of that."

The threat of Omicron is also damaging the Canadian economy, with many concerned about another lockdown and supply chain issues.