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    Canada’s manufacturing sales increased by 0.3% in June, but year-over-year figures declined by 2.7%

    by VT Markets
    /
    Aug 15, 2025
    In June, Canada’s manufacturing sales went up by 0.3%, reaching $68.5 billion. This increase ends four months of decline. Sales rose in 13 out of 21 subsectors. Notably, the petroleum and coal subsector saw an 11.8% increase, while the food subsector grew by 2.5%. However, these gains were partially offset by a 5.0% decline in the transportation equipment subsector.

    Year Over Year Comparison

    Compared to last year, total manufacturing sales in June fell by 2.7%. The June sales data, which fell short of expectations, highlights a shaky Canadian economy. Even with a slight monthly increase, it follows four months of decreases, and the year-over-year figure remains negative at -2.7%. This continues to confirm the economic slowdown we’ve been tracking throughout 2025. This weak report, along with recent job data showing unemployment rising to 6.2%, makes a Bank of Canada rate cut more likely. We should prepare for a more dovish stance from the BoC in their September meeting, as the case for keeping rates steady weakens. Traders might consider options or futures that bet on lower overnight rates by the end of the year.

    Impact on Currency and Trade

    As a result, we expect the Canadian dollar to weaken further against the US dollar. The interest rate gap will likely widen in favor of the USD, continuing the trend we observed in late 2024 when the US economy showed more strength. Buying USDCAD call options or futures could be a strategic way to capitalize on this outlook in the coming weeks. The data also shows a clear divide in the economy, with strength in petroleum but notable weakness in transportation equipment. This split suggests it might be wise to take a defensive approach in stock index derivatives, while also considering bullish investments in the energy sector through options on relevant ETFs. The 5.0% drop in transportation equipment may present bearish opportunities in auto parts and related industrial stocks. Create your live VT Markets account and start trading now.

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