Economists have said that the victory of Donald Trump, who has been sworn in as the new president of the United States (US), is likely to cause a massive change in the Canadian economy.
Trump's economic policies may cause inflation in the US. Because of this, a change in US interest rate policy is likely to have an impact on Canadian interest rates and the value of the Canadian dollar, they noted.
Trump has promised to impose higher tariffs on imports from many countries, including China, lower tariffs and simplify regulations.
America's economy
Economists predict that the move could raise inflation in the US economy by at least 3 percent.
Thus, the US Federal Reserve interest rate reduction action will lead to recession.
At the same time, Canada will have to consider US interest rate policy when it lowers its interest rate, and the value of the Canadian dollar against the US dollar will increase, which will increase the price of Canadian imports.
Economists have said that if such a situation develops, there will be a change in Canadian interest rates and the value of the Canadian dollar will decrease below 70 cents against the US currency.
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