TD Securities analysts have pointed to upcoming Canadian inflation data and the possibility of US Section 338 tariffs on Canadian exports as significant near-term risks for the Canadian dollar. According to FX Street, the firm expects July’s headline Consumer Price Index (CPI) to rise 2.9% year-on-year, with core CPI at 1.85%. Meanwhile, retail sales for June are forecasted to remain flat at 0%.
These figures suggest a cautious outlook for the Canadian economy, as inflation trends and trade tensions could influence currency movements in the coming weeks. The potential imposition of US tariffs under Section 338 adds to uncertainty, potentially weighing on Canadian export sectors and the currency.
For Japanese investors and traders, monitoring these developments is important given the close trade ties between Canada and Asia, and the impact that currency fluctuations can have on FX and equity exposures.