Toronto: Oil prices are gaining momentum with recent news of strikes of Kuwaiti oil field worker. We should be more cautious about catching this momentum by Canadian Loonie. As every one knows that because of lower loonie cost, canada manage to gain lot of lost manufacturing conracts, which were bound to go to Mexico.
Now, as oil prices going marginally up, and expected to remain close to $ 60.00, canadian government should be cautious and not to take it as a win of canadian loonie and starting ramp up new projects and increase government debt.
It is actually two sided sword.
If loonie gain against US dollar we can manage keep our cost of imported grocery down, and inflation under control. But if we loose our trade because of that than we might loose some of the business we are getting from USA. This will ultimately leads us to lower job rate and higher unemployment rate, as well as lower tax collection. Brent Crude $ 44.03 at 4/19/2016.
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