Canada's Economy Boosted by Strong Exports Amid Trade Tensions

The Canadian economy has shown resilience in recent times, with real GDP growth reaching its fastest pace since 2023 at 3.3% in the second quarter of this year.

Growth was driven by strong goods exports, a rebound in business investment and solid household spending, according to data from Action Forex.

However, new U.S. tariffs could have a moderate impact on Canadian GDP growth over the next year, while Canada's reciprocal tariffs may only have a marginal effect but add modestly to inflation.

In contrast, U.S. markets are balancing resilient demand against persistent inflation and renewed trade frictions, with Fed Chair Kevin Warsh delivering a hawkish assessment at Jackson Hole that underlying inflation remains too high.