FX.co ★ Canadian Dollar Steady After Monthly GDP

The Canadian dollar maintained stability around 1.365 per USD, coming back from its eight-month low of 1.354 recorded on June 16th. This stabilization is attributed to a weaker US dollar, as optimism for Federal Reserve easing supports most currencies, though the Canadian dollar has slightly retracted from its recent rally. Domestically, the Canadian economy appears poised for a second month of contraction at 0.1% in May, following a similar decline in April, highlighting its susceptibility to US tariffs and trade uncertainties. Additionally, the recent decline in oil prices, driven by a stable ceasefire in the Middle East and abundant US crude stockpiles, has weakened a vital support for Canada’s trade terms. Nevertheless, the Bank of Canada’s consistent approach, underpinned by persistent core inflation above target and assertive future guidance, continues to buoy the Loonie.