A pair of financial benchmarks hit dubious milestones today.
Oil dipped below $30 US a barrel for the first time since November 2003. The plummeting oil prices have been blamed for the state of the Canadian dollar, which slumped below 70 cents US for the first time since April 2003.
While both managed to rally and close just slightly above those benchmarks, economist Mike Moffatt, a professor at the Ivey Business School at the University of Western Ontario, says the psychological impact is still real.
“Once people start hearing that the loonie is in the sixty-cent range, I think that starts affecting people’s decisions. They get a little more worried about their job, particularly if they’re in a resource sector, they start spending a little bit less,” Moffatt explains. “Those psychological barriers matter a great deal, probably more than they should when people are making their decisions on what to by or where to travel to.”
One of the hardest hit parts of our daily lives may be at the grocery store, where prices continue to rise on produce.
“We’re feeling it at the grocery store. The price of oranges, for instance, are up more than fifteen per cent since last year. That’s only going to up further as the loonie continues to slide. It’s really tough times for those living on a fixed income who are trying to eat healthy.”
It appears that things may get worse before they get better, too. Finance Minister Bill Morneau is warning that there is no quick fix and that the outlook remains weak for both the global economy and commodity prices.