Trump threatens to dismantle NAFTA agreement
Donald Trump has stated he feels the North American Trade Agreement (NAFTA) is nowhere near as beneficial to the US as it should. Renegotiations began on 16th August and hopes were to have them concluded by the end of the year. It now looks as though talks could continue to Spring. The consequences of the trade deal should not be underestimated. NAFTA is the worlds largest free trade deal and Mexico and Canada’s GDP could take a serious hit if the new terms of the trade deal are not satisfactory. The US is Canada’s primary trade partner.
If there is one factor that the currency market does not react well to it is uncertainty. With negotiations proving problematic due to Trump’s outrageous demands this does not bode well for the Canadian Dollar. If you are a Canadian Dollar seller it may be wise to take advantage of current levels.
OPEC Deal in jeopardy
The Organisation for Petroleum Exporting Countries (OPEC) currently has a deal in place to limit the supply of oil due to over supply hitting the price. The deal is flimsy with many parties threatening to cut away from the deal and flood the market. Canada’s primary export is oil and should over supply become a problem again and oil does fall in price the Canadian Dollar could fall significantly in value.
Saudi Arabia seem to be the biggest threat to the OPEC deal. If there is any hindrance in Saudi Aramco’s IPO (the biggest IPO in history) set for 2018 they have threatened to quit the deal. Keep a close eye on developments if you have a trade involving the Canadian Dollar.
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