Canadian Dollar Steady After Monthly GDP

The Canadian dollar stabilized around 1.365 per USD, after retreating from its eight-month low of 1.354 seen June 16th, as a softer greenback amid hopes for Fed easing continue to prop up most currencies even as the Canadian dollar pares a bit from its recent rebound.

Domestically, the Canadian economy is likely set for a second consecutive monthly contraction of 0.1% in May, following a similar downturn in April, underscoring the economy’s vulnerability to US tariffs and trade uncertainty.

At the same time, oil’s recent plunge, fueled by a stable Middle East ceasefire and ample US crude stocks, has trimmed a key support pillar for Canada’s terms of trade.

Nonetheless, the Bank of Canada’s steady-as-she-goes stance, reinforced by persistent core inflation above target and hawkish forward guidance, has kept the Loonie buoyant.