The North American Free Trade Agreement (NAFTA) is currently being negotiated due to Trump’s vocal unhappiness with the current agreement. He has described it as the worst “trade deal in history”. Talks surrounding the NAFTA agreement have been ongoing, and a cause for concern for the Canadian Dollar. More information on Canada's current position below. The table shows the difference in Canadian Dollars you could have purchased with £200,000.00 during the high and low trading points on Monday.
|Currency Pair||% Change||Difference on £200,000|
Negotiations have been ongoing with US and Mexico, but Canada looks to have been frozen out from talks.
It seems as though separate deals between the US and Mexico and the US and Canada could be on the cards.
It is not to say this could not prove beneficial for Canada, a separate deal could be a preferred. outcome At the moment it is very difficult to predict the outcome of how Mexico and Canada will continue to trade with the US with Canada not actively participating in talks.
If there is still the intention to keep NAFTA intact it could be the case that a deal will be struck between the US and Mexico and Canada are left in a weak position for negotiation.
Brian Cowley, MD of the Macdonald-Laurier institute stated “They’re going to clearly strike a deal with Mexico and say to Canada, are you in or you out?”
Despite the uncertainty surrounding the trade deal Sterling continues to suffer against the Canadian Dollar. The burden of Brexit is a heavy weight to carry for the pound. In current market conditions I am afraid to say you may need to rely on Canadian Dollar weakness rather than Sterling strengthening of it’s own accord.
In order to see substantial gains for thePpound I think we need to see the possibility of a “no deal” scenario being completely ruled out.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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