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Bank of Canada Q2 Business Outlook Survey shows the direct impacts tariffs are having on firms’ outlooks are less severe than in Q1
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Q2 Business Survey Indicator -2.42 from -2.12 in Q1 (revised from -2.14)
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Firms less worried by worst-case tariff scenarios
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Tariffs and related uncertainty continue to have major impacts on businesses’ outlooks
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Most firms expect to maintain current staffing levels and limit investment to regular maintenance over the next 12 months
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Fewer export-focused firms expect the worst-case tariff-related scenarios that they envisioned in Q1
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23% of firms expect inflation to be above 3% for the next 2 years, unchanged from Q1
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43% of firms expect lower labor costs over next 12 months, 9% see higher labor costs
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Consumer survey shows expectations for 5-year inflation have risen to 3.45% from 3.39% in Q1
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24% of firms reported outright decline in sales over previous 12 months, down from 28% in Q1
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28% of firms expect Canada to be in a recession over the next year, down from 32% in Q1
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Balance of opinion on indicators of future sales drops to -6 from +22 in Q1
The USDCAD – like other currency pairs – fell below its 200 hour moving average. For the USDCAD, the 200 hour moving average comes in at 1.37846. The momentum to the downside stalled near the low from Friday’s trade at 1.3695 and stalled.
The price moved back above the 200 hour moving average and has been trading above and below the last few hours.
However, the downside move has continued with a new low now being printed as I type. The next target comes against the 38.2% retracement of the July trading range at 1.36902. Move below that level and it opens the door for further selling.
Moreover – and more importantly – the new low has now set the 200-hour moving average as a close risk level for traders. It would take a move back above that level to discourage the sellers on the failed break to the downside.
Remember, visit investingLive.com (formerly ForexLive.com) often for additional, original views on all instruments
This article was written by Greg Michalowski at investinglive.com.