Canadian Economy Faces Downward Revision as central Bank Signals Potential Rate cut
Ottawa, ON – Canada’s economic outlook has been tempered, with the central bank revising its growth forecasts downwards and hinting at a potential interest rate cut. The Bank of Canada now anticipates 1.3% growth for the current year, a decrease from the previously projected 1.8%, and expects a further slowdown to 1.1% next year.This adjustment follows a modest 1% rebound in the third quarter. The central bank’s stance remains contingent on economic performance, with a weakening economy and its impact on inflation potentially triggering another rate reduction. The current tariff landscape, including a 25% US tariff on non-exempt goods under the USMCA, along with existing tariffs on steel, aluminum, and non-US content vehicles, and Canada’s retaliatory measures, are factored into these projections.
Australian dollar Weakens Amid Rate Cut Expectations
Sydney, Australia – The Australian dollar has experienced a notable decline, marking its fifth consecutive session of losses. The currency fell to a low of approximately $0.6425 yesterday, its weakest point as June 23, after failing to sustain a new yearly high of around $0.6625 last Thursday. While it has seen a slight recovery to $0.6475 today, it is indeed currently trading in a narrow range between $0.6450 and $0.6455.
Despite a series of economic data releases today, including a significant 11.9% surge in building approvals for June and a robust 1.2% jump in retail sales for the same month, the market remains highly confident that the Reserve Bank of Australia will implement its third quarter-point rate cut on August 12. Building approvals exceeded expectations for an 1.8% gain, marking the second consecutive monthly increase after three prior declines. Retail sales growth was triple the median forecast. inflation-adjusted retail sales rose 0.3% in Q2, following a revised 0.1% gain in Q1. Private sector credit expanded by 0.6%, aligning with the year’s average pace. Though, both import and export price indices saw declines in Q2, with export prices falling 4.5% after a 2.1% rise in Q1, and import prices slipping 0.8% after a 3.3% increase in Q1. Nearby support for the Australian dollar is anticipated around the $0.6400 mark, with the 200-day moving average situated slightly below at approximately $0.6390.
Mexican Peso Faces Pressure Despite Strong Growth Data
Mexico City, Mexico – The US dollar traded with mixed results against the Mexican peso yesterday, ultimately settling above its previous day’s high. The dollar briefly surpassed MXN18.87 in late trading,eclipsing the July 15 high of approximately MXN18.8850 before retreating to nearly MXN18.7830. Though, the dollar has regained strength in European trading, recovering to MXN18.85. A break above MXN18.8850 could see the next significant resistance level at around MXN18.93, which represents the 50% retracement of the dollar’s recent decline from its June 23 high of approximately MXN19.3430.
Mexico’s economy surprised analysts with a 0.7% expansion in the second quarter, exceeding the median forecast of 0.4% growth and following a 0.2% increase in Q1. Despite this positive economic news, the impact on the peso was overshadowed by broad-based gains in the US dollar. In Brazil, the central bank maintained its Selic rate at 15.0%, as widely expected, with the market anticipating a future rate cut. the brazilian real experienced volatility throughout the day, but the dollar closed the session slightly weaker against the real, trading near BRL5.57. News of a one-week delay in the implementation of a 50% US tariff, along with exemptions for key products such as orange juice, oil products, aircraft, and machinery, contributed to the real’s recovery from earlier losses.
