Is the Canadian Dollar’s Collapse the Canary in the Coal Mine for North American Markets?
Statistics Canada reported on Thursday that the Canadian economy contracted by -0.1% in May, as measured by Gross Domestic Product (GDP), matching market expectations and marking a second consecutive monthly decline, as goods-producing industries declined while services-producing industries were essentially unchanged. The data comes just a day after the Bank of Canada (BoC) decided to keep its policy interest rate unchanged at 2.75%. While the central bank noted that overall inflation is close to its 2% target, it also pointed to ongoing underlying inflation pressures and growing uncertainty tied to US trade policy and rising global tensions. BoC Governor Tiff Macklem struck a cautious tone, saying more rate cuts are on the table if the economy continues to soften and trade-related price spikes stay under control.
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