Canada’s trade balance is at record negative levels: additional oil revenues will not bridge the gap.
Fear of a full-tilt trade war in steel and aluminium tariffs is weighing on growth. Manufacturing is close to overheating, yet households could tighten spending as housing markets weaken and credit tightens.
Last week’s Bank of Canada meeting triggered a CAD rally as the central bank removed 'cautious' from its monetary policy statements. This raises the likelihood of a July rate hike: higher interest rates could be the catalyst for a stronger CAD.
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