USD/CAD: Loonie Rallies Hard On NAFTA Hopes
Dean Popplewell | Aug 27, 2018 12:08
The Canadian (C$1.2975) dollar has rallied aggressively this morning against the USD. It’s been pushed higher on NAFTA optimism, but on the crosses there is little change (EUR/CAD €1.5129, GBP/CAD £1.6719).
The ‘proof will be in the pudding,’ but ahead of the announcement U.S. markets have rallied from the session’s outset on news of a potential NAFTA deal reached between the U.S. and Mexico.
Material and automotive names are trading higher on the day amid the boost in risk-on sentiment, though gold ($1,206) and oil are roughly flat ($68.71).
U.S. Treasury yields (10’s 2.815%) are up modestly with the curve shifting higher. USD/MXN – Mexico peso is 0.6% higher at $18.6711.
It’s believed that the Mexican president has spoken to Canadian Prime Minister Justin Trudeau and has encouraged him to re-join NAFTA talks to seek a trilateral accord this week.
Update:
- US and Mexico reach trade deal to replace NAFTA
- To see +40-45% of auto content made by workers earning avg. base wage of $16/hr
- Would boost U.S. and regional content in autos to +75% (prior +62.5%)
Canada Fin Min Freeland expected in DC shortly for talks; discussions with Canada to accelerate Monday and wrap up by end of the week.
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