Canada and Brazil are reviving negotiations to establish a free trade agreement with Mercosur—the South American bloc that includes Argentina, Uruguay, Paraguay, and potentially Bolivia. Talks are expected to formally resume between September and October, according to Brazilian Foreign Trade Secretary Tatiana Prazeres. The initiative comes as Canada seeks to diversify its trade partners amid ongoing U.S. tariff pressures. In 2024, Canada’s trade with Brazil totaled $9.1 billion, resulting in a $3.5 billion surplus for Brazil.
At the same time, Canada’s S&P/TSX Composite Index is projected to rise by 2.3% by the end of 2025, reaching nearly 28,553 points, according to a Reuters poll. Optimism extends further, with analysts expecting the index to reach 30,000 by the end of 2026. Rate cuts from the Bank of Canada—totaling 225 basis points since mid-2024—and easing trade tensions with the United States are cited as key drivers of this growth.
Challenges remain, including a softening labor market and potentially weaker corporate earnings in the second half of 2025. Still, investor sentiment is supported by strong fundamentals in Canada’s resource and export-oriented sectors, such as energy and materials, which make up about 30% of the TSX.
Meanwhile, the Canadian dollar weakened to 1.3855 per U.S. dollar, its lowest in nearly three weeks. The decline followed a drop in oil prices and softer inflation data—annual inflation eased to 1.7% in July, while core inflation also fell. These figures increased expectations of another Bank of Canada rate cut in September, with markets now assigning a 39% probability.
For businesses and individuals relying on cross-border transfers, these shifts carry significant implications. As MoneyWay continues to provide competitive exchange and reliable transfer services in Vancouver, monitoring currency movements and trade developments will be essential for clients making international payments.
Source: Reuters — Brazil in talks with Canada to revive Mercosur trade deal, Canada’s TSX stock index predicted to rise 2.3% by year-end, Canadian dollar falls as inflation data fuels rate cut bets
