In the early hours of Sunday morning, Canada agreed to sign on to a trade deal between the United States and Mexico, the North American Free Trade Agreement after more than a year of negotiations going backwards and forward between the US and Canada. More information on the recently agreed deal and upcoming economic data likely to impact cable rates in the USD report below.
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Effectively, the deal gives US farmers greater access to Canada’s dairy market, and helps to alleviate some of the worries associated with access to the US auto industry from both nations involved.
GBPUSD was actually trading lower yesterday despite the positive news from the two nations agreeing trade terms. The outlook of the US economy is clouded at the minute by President Trump's ongoing trade war with China. Yesterday, September’s Institute of Supply Management report softened to 59.8 from 61.3 the month before.
Although the US manufacturing sector is still well, continued uncertainty surrounding US-China trade is likely to further impact manufacturing, and could hinder US economic growth. If growth does start to slow in the coming months, it could start to impact on the Federal Reserve’s rate hike plan and ultimately lead to longer term USD weakness.
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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The main event to be watched by investors from the US side this week is the highly anticipated US September labor report on Friday. Whilst the US was hit by the devastating Hurricane Florence recently, analysts aren’t expecting this to feed through into US data just yet, so the US Dollar could be set to strengthen if the data comes in line with expectations, which is set to be a moderate rise of 10,000 new jobs from last month.
Outside of economics, trade war developments are likely to continue to effect the Dollar’s value. Rumors circulated yesterday that President Trump is set to meet President Xi Jinping at the G20 summit on the 30th November. With so much happening in global politics that could affect not only US Dollar but most of the major currencies alike, it's a good idea to be in contact with your account manager here to be kept abreast of the factors impacting your exchange.