The Canadian economy expanded at an annualized rate of just 0.4% in the first quarter, slightly worse than expected, although monthly growth in March grew by 0.5% from February on widespread improvement across both the goods and service producing sectors. The Canadian dollar is trading a tad weaker at 1.3541, up 0.35 percent on the day against the greenback.
US President Donald Trump has announced a new 5 percent tariff on all imported goods from Mexico unless the country’s leaders do more to stop illegal migrants entering America. The Mexican peso fell sharply after the announcement and hit two-month lows against the greenback.
Bank of Canada Senior Deputy Governor Carolyn Wilkins reiterated the central banks view that the slowdown in late 2018 and early 2019 was temporary. However, global trade risks have increased and the current accommodation provided by the BoC remains appropriate.
Fed Vice Chair Richard Clarida said the US economy is in a good place and the level of interest rates are appropriate. However, he also mentioned that the central bank would act if inflation stays too low or global and financial risks endanger the economic outlook.