Canadian trade deficit expands
Daily Currency Update
Unlike Canada’s neighbor to the south, the Canadian trade deficit has expanded by 1 billion from last month’s numbers. Exports in particular have decreased by 2.2%. A large contributor to this drop was exports to the US which have declined 5.5% month-over-month. It is clear that both the US and Canada are struggling with higher interest rates domestically, but it also appears that both countries are struggling with international trade as well.Key Movers
The US trade deficit fell from 68.3 billion in May to 65.5 billion in June. A drop in the trade deficit implies that the US has imported less than it had previously in comparison to its exports. Overall, this is an indication that US businesses and consumers are spending less. This indication is in line with other data releases showing that higher interest rates have curbed American spending.In the European region today, Germany reports an inflation rate of 6.2%, down from 6.38% in June. This is a significant point as Germany is the largest economy in the Eurozone and could influence future rate hikes by the European Central Bank.
The National Australian Bank reports a Business Confidence Index rating of 2, up from -1 in June. Above 0 on the Business Confidence Index implies improving conditions for Australian business while below 0 indicates a worsening industry.
China’s exports fell 14.5% in July compared to the same time last year. This marks the deepest decline in China’s exports since February 2020.
Expected Ranges
- EUR/CAD: 1.46975 - 1.47707 ▲
- GBP/CAD: 1.70709 - 1.71342 ▲
- AUD/CAD: 0.87440 - 0.87925 ▼
- USD/CAD: 1.33574 - 1.35019 ▲