Forex
Home›Forex›Central Banks›Bank of Canada meeting, jobs and trade data set to ste…
Bank of Canada meeting, jobs and trade data set to steer Canada outlook
Canadian trade surplus is expected to widen to $4.2 billion in July, helped by potential tariff front-loading before July 20 U.S. tariffs took effect on August 22.
A near term focus for Canada’s macro outlook is building around the next Bank of Canada meeting, upcoming jobs and trade releases, and the timeline for new U.S. tariffs. Action Forex says re-escalation in the Canada U.S. trade dispute has not led to a significant downgrade of the economic outlook so far, with the immediate issue shifting to how quickly the new tariffs affect Canada once they begin.
For July trade data released on Thursday, Action Forex expects signs of another round of tariff front-loading. The outlet points to the fact that the United States announced new tariffs on July 20 that did not take effect until August 22, which typically gives importers an incentive to build inventory ahead of the effective date, and it forecasts Canada’s trade surplus widening to $4.2 billion from $3.9 billion in June.
On the labor market, consecutive large job gains pushed Canada’s unemployment rate down to 6.4% in July, though Action Forex notes it remains above historical norms, leaving room for hiring to recover. Looking ahead, it expects August employment to rise by 5,000 and the unemployment rate to hold steady, while job postings from Indeed.com were little changed.
Action Forex also expects the Bank of Canada to balance recently stronger backward-looking data with forward-looking risks from renewed trade uncertainty and inflation pressures, including from high oil prices. It says the silver lining is solid 3.2% annualized GDP growth in Q2 and core inflation prints that have been on target since April, and it expects the central bank to keep interest rates unchanged, while warning further tariff escalation could delay planned rate hikes.
Latest closeSilver $68.61 ▼0.0%