Canadian Dollar Strengthens For The Third Consecutive Week

On Friday, US stock indices ended the session lower under the pressure of weak macroeconomic data indicating a slowdown in economic growth. By the end of the day, the Dow Jones (US30) fell by 0.20% (weekly result -0.63%). The S&P 500 (US500) declined by 0.17% (weekly result +0.44%). The tech-heavy Nasdaq (US100) closed Friday in the red at 0.13% (weekly result +1.13%). Investor sentiment was weighed down by the preliminary August reading of the University of Michigan Consumer Sentiment Index, which dropped to 51 points (versus expectations of 55), as well as the sharpest decline in retail sales in July in the past year. The combination of these factors, along with moderate inflation and cooling labor market conditions, intensified concerns about potential corporate profit compression amid weakening consumer activity. Semiconductor producers showed mixed dynamics: Broadcom shares fell 5.9%, Intel lost 2%, while Nvidia’s stock saw only minor changes. Meanwhile, AMD surged 6.5%, and memory chip manufacturers continued the steady rally that began earlier in the week.

The Canadian dollar (CAD) strengthened to 1.39 CAD per USD, marking its third consecutive week of gains amid a narrowing yield differential between US and Canadian bonds (the 2‑year government bond spread tightened by roughly 17 basis points). Strong domestic data supported the currency: manufacturing sales rose 0.1% in June (the fifth consecutive month of growth), and overall estimates suggest that Canada’s economy expanded by 3.4% year‑over‑year in the second quarter, significantly exceeding the Bank of Canada’s outlook of 2.5%.

On Friday, Germany’s DAX (DE40) rose by 0.53% (weekly +0.30%), France’s CAC 40 (FR40) closed down 0.16% (weekly -0.85%), Spain’s IBEX 35 (ES35) slipped 0.06% (weekly -0.03%), and the UK’s FTSE 100 (UK100) ended the session lower by 0.21% (weekly -1.38%). European stock indices finished slightly negative on Friday amid a local correction in the tech sector and declines in pharmaceutical stocks. According to the second preliminary estimate, the Eurozone economy grew by 0.4% in Q2 2026 compared to the previous quarter, fully confirming the initial reading and marking the strongest pace since early 2025. Among major economies, Spain once again led with GDP growth of 0.7% (after 0.6% in Q1), beating analysts’ expectations. The Netherlands’ economy expanded by 0.4%, double market expectations, while France rebounded from a 0.1% contraction to grow 0.2%. Germany and Italy also posted 0.2% growth.
According to preliminary estimates, Switzerland’s economy showed strong growth of 1.5% in Q2 2026 (the three months to June), compared to 0.4% in the previous period. This quarterly result is the highest since Q3 2021, confirming the economy’s resilience to external challenges, including elevated energy prices amid Middle Eastern tensions and ongoing trade uncertainty.

On Friday, oil prices exceeded $82 per barrel, ending the week with a gain of more than 5%. The main driver was increased US economic pressure on Iran aimed at unblocking shipping through the critically important Strait of Hormuz. US Treasury Secretary Scott Bessent announced preparations for unprecedented economic measures and the continuation of the maritime blockade of Iranian ports. The situation in the region remains tense: Iran and Oman have not yet reached an agreement on restoring full passage through the strait, despite early market optimism. Against this geopolitical backdrop, the International Energy Agency (IEA) warned of a worsening supply deficit in the global market, predicting the largest oil shortage in five years in 2026.
In Asia, Japan’s Nikkei 225 (JP225) rose by 0.59% (weekly +4.51%), China’s FTSE China 50 closed down 0.23% (weekly -0.61%), Hong Kong’s Hang Seng (HK50) fell 1.10% (weekly -2.67%), and Australia’s ASX 200 (AU200) ended Friday down 0.80% (weekly -1.45%).

The Australian dollar (AUD) strengthened above 0.709 USD, reaching its highest level in ten weeks. The currency’s rise was supported by the Reserve Bank of Australia’s (RBA) continued hawkish rhetoric amid broad US dollar weakness triggered by soft US macro data pointing to subdued inflation, falling retail sales, and deteriorating consumer sentiment. As a result, the probability of a September Fed rate hike fell to roughly one in three (down from nearly 50% earlier). In Australia, the RBA left its key rate unchanged at 4.35% last week, but Governor Michele Bullock warned of potential renewed tightening due to the closure of the Strait of Hormuz and weak productivity growth.

The New Zealand dollar (NZD) strengthened to 0.590 USD, continuing its recovery and reaching its highest levels since early June. The main driver behind the weakening US dollar and rising NZD was unexpectedly weak US retail sales data, which forced investors to reassess expectations and reduce the likelihood of a Federal Reserve rate hike at the upcoming meeting. Additional support for the NZD comes from stable market expectations that the Reserve Bank of New Zealand (RBNZ) will raise rates again next month by another quarter point, continuing its course of withdrawing monetary stimulus.

• S&P 500 (US500) 7,785.76 -13.23 (-0.17%)

• Dow Jones (US30) 53,732.41 -107.58 (-0.20%)

• DAX (DE40) 26,440.31 +140.57 (+0.53%)

• FTSE 100 (UK100) 10,750.11 -22.56 (-0.21%)

• USD Index 99.64 -0.33 (-0.33%)

News feed for: 2026.08.17

• Japan GDP (m/m) at 02:50 (GMT+3) – JPY (MED)

• China Industrial Production (m/m) at 05:00 (GMT+3) – CHA50, HK50 (MED)

• China Retail Sales (m/m) at 05:00 (GMT+3) – CHA50, HK50 (MED)

• China Unemployment Rate (m/m) at 05:00 (GMT+3) – CHA50, HK50 (MED)

• Canada Consumer Price Index (m/m) at 15:30 (GMT+3) – CAD (HIGH)