FX.co ★ Canadian Dollar Steady

The Canadian dollar held steady at 1.365 per USD, closely aligned with its eight-month peak of 1.354 noted on June 16th. This stability was largely due to the weakening of the US dollar, influenced by dovish Federal Reserve indications, the patient approach of Fed Chair Jerome Powell, and growing fiscal concerns following President Trump's $3.3 trillion tax-and-spending initiative, coupled with an unexpected 33,000-job decline announced by ADP. Concurrently, the uncertainty surrounding US trade policies is intensifying, especially with the approaching July 21st framework deadline for negotiations on autos, steel, and aluminum following the repeal of the digital services tax. The potential for increased tariffs on other trade partners further clouds Canada's export prospects. Domestically, S&P Global reported that Canada's Manufacturing PMI for June plunged to 45.6, the lowest it has been in over five years. This marks the fifth consecutive month of contraction in the manufacturing sector, driven by export orders impacted by tariffs and significant reductions in inventory, heightening concerns about economic growth.