Forex News

Live Forex news from all over the world.


Canadian Dollar Stumbles to Six-Week Low on Trump-NAFTA Remarks

September 4, 2018 at 14:37 by Andrew Moran

Many 100-CAD notesThe Canadian dollar stumbled to its lowest level in six weeks on Tuesday after President Donald Trump suggested that it is not necessary to keep Canada in a new trade deal, a remark that comes a week after reaching an agreement with Mexico. The loonie will now try to find momentum in upcoming economic data.

On Saturday, President Trump tweeted that a fair deal is required, otherwise “Canada will be out” from any trade agreements. The president also took a shot at the congress, suggesting that lawmakers should stay away from negotiations or he will terminate the North American Free Trade Agreement (NAFTA), which, he says, “was one of the worst trade deals ever made.”

President Trump’s tweets occurred after US and Canadian trade negotiators failed to reach an agreement before a key deadline prior to the Labor Day long weekend. With representatives predicting a conclusion to trade deliberations by October at the latest, additional talks between both sides are scheduled to resume on Wednesday. American and Canadian officials have repeatedly stated that they will only reach a deal when it is good for both sides.

Last week, the US and Mexico struck a bilateral trade deal that did not include Canada. In the aftermath, analysts had been optimistic that Ottawa would join the new trade pact, but then talks immediately broke down.

Canada remains one of the biggest trading partners to the US. In 2017, the nations traded more than $670 billion in goods and services.

Investors will now look ahead to key economic reports. In Canada, the Manufacturing Purchasing Managers’ Index (PMI), the Trade Balance, and a Bank of Canada (BOC) monetary policy announcement are slated for this week. In the US, traders will comb through the August employment report, weekly jobless claims, motor vehicle sales, manufacturing data, and the July trade deficit.

The USD/CAD currency pair surged 0.77% to 1.3198, from an opening of 1.3096, at 14:08 GMT on Tuesday. The EUR/CAD edged up 0.08% to 1.5227, from an opening of 1.5214.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Leave a Reply