The new ‘reciprocal’ tariffs are having little impact on the market. Canada deserves special attention in our opinion, especially after Mexico ensures another extension of pause yesterday, says FX analyst of Ing Francesco Pesole.
USD/CAD points to 1.40 in the short term
“Despite the partial protection of the USMCA against the new 35%tax, we believe that the markets continue to underestimate the downward risks for the Canadian economy. Expectations are still that the US and Canada will reach an agreement, but the progress in negotiations has been mediocre so far and the recognition of Canada de Palestine as a state created another obstacle.”
“Earlier this week, the Bank of Canada seemed to leave the door very open to additional rate cuts if the activity and/or the labor market deteriorate. We see risks on both fronts, and the valuation of 15 basic points by the end of the year continues to seem excessively conservative. We expect at least one cut for the end of the year in Canada, and we point to 1.40 in the USD/CAD in the short term.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
