Yesterday, Bank of Canada Deputy Governor Wilkins gave a rather dovish speech outlining that Canada was able to withstand any global economic downturn, basically she said “The global context has worsened, increasing risk to global expansion and chances of financial stress that could spill over into Canada”. She stated that even with rates as low as 1.75%, there was still some room left if need be. Canada’s CPI matched expectations, it has grown at 1.9% or more on an annual basis for eight straight months, reinforcing the central bank’s recent decision to keep interest rates unchanged. The gains have coincided with a robust labor market, and come despite weak business investment and exports.
The U.S. and China tensions are escalating as hopes of a trade deal receded. China condemned a U.S. Senate measure aimed at protecting human rights in Hong Kong amid prolonged protests, further souring the mood after President Donald Trump warned he would raise tariffs if no deal was reached.
Today the Fed releases its FOMC minutes expect nothing new.
The Canadian dollar is weaker and as a result it is now in a new range, its’s back to its October 10 levels and will likely stay here for a while.
Currently Close Range
USDCAD 1.3310 1.3268 1.3263-1.3315
EURCAD 1.4727 1.4699 1.4687-1.4736
GBPCAD 1.7189 1.7149 1.7128-1.7195