US trade policy remains unpredictable

Bank of Canada Governor TIFF McCalem answered the questions of reporters on the policy approach of the Central Bank. The decision to recently follow the BOC policy rate at 2.75%was followed, which was largely estimated by the market.

https://www.youtube.com/watch?v=Nci2bf3ehbu

BOC Press Conference Key Highlights

We see signs of underlying underlying pressure on inflation.

The US trade policy is unpredictable.

We are looking at less than normal.

The Canadian economy is showing symptoms of flexibility.

Below this section was published on 13:45 GMT to cover the policy announcements of Bank of Canada and the initial market response.

According to the expectations of market analysts, the Bank of Canada on Wednesday stabilized its policy rate at 2.75%.

BOC policy statement highlights

• The Bank of Canada Monetary Policy Report does not provide economic forecast and cites uncertainty arising by American tariffs.
• The risk of a serious and growing global trade struggle has decreased from April.
• One with current tariff landscape releases two alternative scenarios, one has increased and the other with a decrease in tariffs.
• In the current tariff landscape, GDP grows by about 1% in the second half of 2025 and then kills 1.8% in 2027; The inflation landscape is close to 2% on the horizon.
• In the D-Escamentation scenario, GDP grows by about 2% in the second half of 2025 and then approximately 1.7% at the end of 2027; Inflation falls in Q1 2026 before reaching close to 2% in 2027.
• In the scenario of growth, 2025 increases in 2025 and increases to an average of 2%before lifting in the first half of 2026; Inflation Q3 in 2026 is just above 2.5% and then in 2027 becomes about 2%.
• Q2 Canadian exports have fallen to about 25%; Q2 The possibility of imports fell by about 10%.
• In all three scenarios, the nominal neutral interest rate in Canada is estimated to be in the range of 2.25% to 3.25%.
• The growth of Q2 in final domestic demand is estimated to be above 1%, and an increase in Q2 consumption is approximately 1%.
• Q2 output intervals estimate that Q1 has widened between -1.0% and 0% between -1.5% and -0.5%.

Market reaction

Canadian dollars (CADs) remain on defensive in terms of consistent purchasing USD, navigate the top of the top two months beyond the two -month top of the BOC after BOC’s decision to release the boc’s unchanged rates with USD/CAD.

This section given below was published as preview of Bank of Canada (BOC) monetary policy announcements at 09:00 GMT.

• FXSTITS hopes that the Bank of Canada will maintain unchanged rates on 30 July.
• Canadian dollar maintains a positive tone versus US dollar.
• The July meeting may be a fourth consecutive decision with rates at 2.75%.
• American tariff will be in the news in Governor McCalem’s press conference.

As the Bank of Canada (BOC) is ready to issue a new interest rate decision on Wednesday, July 30, a growing understanding that the cutting cycle can already end.

The BOC decided to keep the rates stable in June, citing a Canadian economy, focused on “soft but rapid weak” and “firmness in recent inflation figures”. Indeed, the policy rate is 2.75%, which remains within the estimated neutral limit of the bank for interest rates, which is determined between 2.25%and 3.25%.

President Donald Trump’s tariff agenda is an important global effect. Since his January return to the White House, he has endangered a group of new levies through the global supply chains, and those dangers will be likely to dominate the post EM meeting press conference of Governor Tiff McCalem.

BOC’s Q2 Business Outlook Survey (BOS) on July 21, indicated that Canadian firms are concerned about the worst situation, but are still hesitant to rented and invest. The BOS revealed that the prophecies of short -term inflation of companies were returned where they were a year ago, and businesses now see the recession landscape as a less likely. Earlier this year, businesses were worried that American tariffs would harm the economy, but so far the impact has been mostly seen in steel, aluminum and vehicle industries.

Consumers are feeling the recession of the economy in their own salary checks, the consumer shows the latest survey of expectations. With the soft look in the job market, more people say they are uncomfortable about hanging in their positions. This concern is allowing everyday life as families are reported to tighten their budget and change their shopping habits as the noise of trade war intensifies. Although they do not estimate the increase in prices in the near future, many people express concern that a new set of tariffs may obstruct the central bank’s ability to control inflation.

Preiring BOC’s interest rate decision, analyst at the National Bank of Canada Taylor Shlech said, “The growing speed around the idea is that the easy cycle is over. We disagree, and we do not expect that the governing council is likely to validate this more Hawkish scene.

When will BOC release its monetary policy decision, and how can it affect USD/CAD?

The Bank of Canada will publish its policy decision at 13:45 GMT on Wednesday with its monetary policy report (MPR). After that, Governor Tiff McCalem will attend a press conference at 14:30 GMT.

Most economists hope that Bank of Canada (BOC) anchor its policy rate at 2.75% on July 30, expanding the break starting in May and June. The decision comes as Canadian dollars, quietly grinds higher, 1.4800 vs. Rebounding from its winter climb near its US counterpart in the current area of 1.3700.

Pablo Piovano, a senior analyst from FXSttert, stated that “USD/CAD maintains its rebound from the annual sector in the 1.3550–1.3540 range. While its major 200-day simple moving average (SMA) is expected to be strong.”

“USD/CAD hit 16 June under a new YTD of 1.3538. Once cleaned this level, more damage can go below all the path of floor 1.3418 (25 September) of September 2024,” said Piovano.

Piovano says that “Ultimate, the pair should participate in the initial resistance on their June roof of the 1.3797 set on 23 June, arriving on May 12 before the Ice of May 1.4015.”

The relative power index (RSI) has turned back to 52 levels, which means that the short -term horizon appears on the card and reverse. Piovano ends by saying, “The average directional index (ADX) below 15 also shows that there is a lack of punishment in the trend.”