Canada: Growth outlook trimmed as trade risks linger – NBC

💡 DMK Insight

The National Bank of Canada’s GDP downgrade is a red flag for traders: it signals potential economic stagnation. With the forecast for 2026 GDP now at 1.1% and potential GDP dropping to 0.6%, this could impact the Canadian dollar and related assets like commodities. A weaker economy often leads to lower interest rates, which could further depress the CAD against major currencies. Traders should keep an eye on CAD pairs, especially with the USD/CAD, as any further deterioration in economic indicators could trigger a sell-off. Look for key support levels in the CAD, and monitor how this news affects market sentiment over the coming weeks. If the CAD weakens significantly, it could also impact commodity prices, particularly oil, which is closely tied to the Canadian economy. Here’s the thing: while mainstream coverage may focus on the immediate implications for the CAD, the broader economic context suggests that traders should be wary of potential volatility in the forex markets as investors reassess their positions based on these forecasts.