Market Highlight 14.03.2025

The Bank of Canada (BoC) announced a 0,25% policy rate cut to 2,75% yesterday in an effort to support the economy amid escalating trade tensions with the U.S. Trade uncertainties have made Canadian households more pessimistic about the economic outlook, leading to an expected slowdown in consumer spending in the first quarter of this year. At the same time, many businesses have scaled back hiring and investment plans. With one-fifth of Canada’s economic output tied to exports to the U.S, the BoC previously warned that a prolonged trade conflict with the U.S could result in a 3% contraction in GDP over the next 2 years. The Canadian dollar weakened by approximately 0,5% to $1.4442 against the USD by the end of yesterday’s session.

The U.S Producer Price Index (PPI) for February, excluding food and energy, recorded its first decline since July 2024. This was driven by a roughly 1% decrease in trade services, reflecting reduced profit margins on imported goods and their distribution to consumers due to the impact of recent tariff hikes. In early February, the Trump administration imposed an additional 10% tariff on Chinese imports, contributing to rising prices for a range of goods, including scrap iron and steel, various machinery, and household items such as furniture and jewelry. The PPI data also showed that food prices surged by 1,7% - the highest increase in 3months - amid continuously rising egg prices in the U.S.

The USD/VND exchange rate rebounded above 25.500 yesterday as the market saw several large-scale USD purchases. The upward momentum is expected to persist in the second half of March, driven by increased foreign currency demand from some foreign-invested enterprises and the potential recovery of the USD in global markets.

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Directly contact us to receive market news and consultancy on foreign exchange products and derivatives:

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