Canada: Solid growth with limited tariff drag – RBC
Royal Bank of Canada (RBC) economist Claire Fan highlights that Canadian growth rebounded strongly in Q2, supported by resilient domestic demand and improving net trade. She notes that U.S.
Royal Bank of Canada (RBC) economist Claire Fan reported that Canada's economy experienced a strong rebound in the second quarter (Q2), driven by robust domestic demand and a recovery in net trade. However, Fan noted that the U.S. Section 338 tariffs, targeting a limited range of Canadian products, pose regional risks to specific industries without significantly hindering overall growth.
As U.S. tariff rates decline, the impact on affected regions and sectors may be more pronounced. Despite this, RBC anticipates only modest adjustments in 2027 if these trends continue. The Bank of Canada has shown a more comfortable stance, given the firming economy and subdued core inflation. Meanwhile, global currency markets saw GBP/USD reach a monthly high around 1.3550 and EUR/USD climb above 1.1550, reflecting a weakening US Dollar amid economic uncertainty.
Gold prices rebounded, hovering near $4,400 following a volatile session, as softer US Dollar and easing Fed rate hike expectations bolstered investor confidence. July's inflation data exhibited slight improvements, with headline CPI increasing by 0.1% month-over-month and core inflation still above the two percent target.
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