Canadian Dollar Crashes As Trudeau Shuts Down Border Over COVID-19

The Canadian dollar is crashing against most currency rivals on Monday after the federal government announced that it would shut down the border to non-Canadian citizens. Anyone who is showing symptoms of Covid-19 will not be permitted to enter the country. This was Prime Minister Justin Trudeau’s first major policy response to the virus outbreak, and he confirmed that more fiscal announcements will be coming this week.

After a lot of speculation as early as Sunday afternoon, Trudeau addressed the nation from self-isolation at Rideau Cottage. He unveiled “increasingly aggressive steps” to tackle the coronavirus, including closing the border to non-Canadian citizens. There are exceptions: permanent residents, their immediate families, diplomats, and US citizens.
Anyone who is exhibiting symptoms of the coronavirus will not be permitted to enter Canada. As of Monday, all incoming travelers anywhere from the world will be asked if they are experiencing symptoms, including coughing, fever, and difficulty breathing. If people are arriving from any international location, they will be asked to self-isolate for 14 days.
The prime minister is also set to list additional flight restrictions and dedicate enhanced screening.
On Tuesday, Finance Minister Bill Morneau is expected to announce fiscal stimulus measures to help businesses, consumers, and the most vulnerable grapple with the economic fallout from the outbreak. So far, Ottawa has dedicated $1 billion to fight the coronavirus, which is in addition to the Bank of Canada (BoC)’s monetary actions.
Last week, the central bank surprisingly slashed interest rates by 50 basis points and unleashed a massive multi-billion-dollar stimulus program to curb the market chaos. The BoC noted that it is ready to fire additional bullets to ensure the Great White North can withstand the turbulence from the economic storm clouds.
On the data front, new motor vehicle sales posted their sixth consecutive months of declines, slumping to 112,845 units in January from 114,045 units in December.
The loonie reacted immediately to the border news.
The USD/CAD currency pair surged 1.32% to 1.3989, from an opening of 1.3901, at 18:02 GMT on Monday. The EUR/CAD spiked 1.9% to 1.5624, from an opening of 1.5328.

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