The Canadian dollar had another very volatile day yesterday. The Governor of the Bank of Canada, Stephen Poloz, stated that leading up to the rate decision (July 11), the BoC was working on incorporating into its projections the effects of U.S. tariffs on the Canadian economy as well as Canadian real estate developments. After losing ground yesterday, the Canadian dollar is up slightly this morning with investors now pricing the likelihood of a key rate increase in July at 50%.
Yesterday’s release of petroleum inventories below expectations helped support WTI crude oil prices, which are at their highest level since November 2014. Stock markets appear particularly vulnerable: measured in U.S. dollars, all international markets have been down since the beginning of the year. Specifically, the Toronto stock exchange index, the Shanghai stock exchange and the Euro Stoxx 50 index are down 5.3%, 17.2% and 7.0%, respectively.
As we wait for Canadian GDP figures to be released tomorrow morning, we are keeping an eye on the final revision of U.S. first quarter GDP.
Emmanuel Tessier-Fleury
Range of the day: 1.3240 – 1.3350