Canadian economy feeling effects of Brexit

By anna smith
Share

Canada is beginning to feel the effect of the UK’s recent decision to leave the European Union.

“We estimate that confidence and financial spillovers from a ‘leave’ result could shave 0.5 to 1.0 percentage points off GDP growth for the U.S. and Canada in the second half of 2016,” TD Economics said in a message to investors.

The Canadian dollar is slightly weaker, down a penny after opening at 78.42 cents. In contrast, the Japanese Yen has risen after the vote, showing an increase of 3.77 percent.

The TSX index closed at 14,071.49 before the last UK referendum vote was collected on June 23. Following the vote, the TSX index hit a low of 13,790.71, dropping almost 300 points before levelling off at 13,930, a drop of roughly 1.5 percent.

The banks which fell furthest in S&P/TSX composite index are the Bank of Montreal (fell by 2.2 percent) and the Bank of Novia Scotia (fell by 2.3 percent).

In a press release, the governors of central banks from the G7 countries said they are working to ensure “adequate liquidity and ensure financial stability.”

“We also have bilateral standing swap arrangements with other central banks to be able to provide liquidity in foreign currencies, if required” said Martin Bégin, senior media relation’s consultant for the Bank of Canada.

The exact strategy and measures taken by the Bank of Canada will be determined based on continual monitoring of market conditions.
 

Follow @BizReviewCANADA

Read the June 2016 issue of Business Review USA & Canada magazine

Share

Featured Articles

What is Nestlé CEO Laurent Freixe’s Action Plan?

Newly appointed CEO sets out action plan involving separating water brands into standalone business and boosting advertising and marketing spend

Will Mulberry Turn a New Leaf Under CEO Andrea Baldo?

International British luxury brand cuts quarter of head office staff as newly appointed CEO conducts strategic review

Female Board Members of Biggest UK Companies Paid 69% Less

Female board members of FTSE 100 companies are paid 69% less than male counterparts, as they find themselves frozen out of the biggest roles

Is This the Next CEO of LVMH?

Leadership & Strategy

How Burberry’s New CEO Is Going Back to Basics

Leadership & Strategy

Is Bayer CEO Bill Anderson Running Out of Time?

Leadership & Strategy