There could be hopes that the NAFTA agreement could be confirmed in as little as a few weeks as, a positive sign for the Canadian economy. This CAD report discusses how this could affect the Canadian Dollar in the coming weeks. The table below shows the difference in CAD you could have achieved when buying £200,000.00 during the high and low points during trading on Monday of this week.
|Currency Pair||% Change||Difference on £200,000|
The North American Free Trade Agreement (NAFTA) was a free trade deal put in place by the US, Mexico and Canada with trade barriers dropping in 1994.
It eliminated tariffs and duties on trade between the three countries and was deemed as a positive step in trade for all those involved.
Trump however has expressed his unhappiness with the current arrangement, going as far as to say it is the worst trade deal ever agreed in history.
Trump has started renegotiation of the deal in order to make it more beneficial for the US.
Negotiations have been long and arduous and the connotations of a failure in an agreement would hit the Canadian economy hard due to it’s heavy reliance on the US purchasing it’s exports.
There is good news however, it is looking like NAFTA talks could be expedited.
Mexico’s President, Enrique Pena Nieto has stated that after meeting US Vice President, Mike Pence and Canadian Prime Minister, Justin Trudeau that a deal could be agreed in the coming weeks.
All seem to have the wish to get the deal in place. Ideally Nieto would like to get the deal sewn up by 1st July which is the date of the Mexican elections. A NAFTA deal in place would be a huge boost to his popularity.
If you are buying the Canadian Dollar it may be wise to perform your trade as no doubt as a deal draws closer the Canadian Dollar will see gains.
Tomorrow we will see the Bank of Canada (BOC) Interest Rate Decision. I would be surprised to see any change considering a rate hike already being administered earlier in the year and a lack of consistent data due to the uncertainty surrounding NAFTA.
There is however the BOC Monetary Policy Report which could give an indication as to monetary policy moving forward. I would be surprised to see an indication of a rate hike short term and think it will be 2019 before any changes in rates from the BOC.
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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