NAFTA Negotiations are set to be problematic.
The North American Free Trade agreement is key to the health of the Canadian economy. The agreement between the US, Canada and Mexico is under threat as US President , Donald Trump feels the deal is nowhere near as beneficial as it should be to the US.
Canada is heavily reliant on the US purchasing it’s exports, if the deal is changed or indeed axed this could have a significant impact on the Canadian economy and in turn the Canadian dollar.
Canadian Prime Minister, Justin Trudeau has been reaching out to Republican senators in an attempt to stave off the trade pact’s collapse. Trump’s demands are deemed to be unrealistic and negotiations are set to be difficult.
The next round of talks are to be held in two weeks time and if it is anything like the previous round of talks that was held in December it may yield little progress.
Trudeau has stated that the NAFTA topic is currently the t issue that worries him, the most. Royal Bank of Canada Chief Executive Officer, David McKay spoke on Tuesday and said that the chances of a NAFTA withdrawal are rising.
If you are a Canadian Dollar seller it may be wise to take advantage of current rate.
BOC Monetary Policy Report, BOC Rate statement and BOC Interest Rate Decision
The next release of importance are due next Thursday. The Bank of Canada (BOC) publishes the monetary policy report. It is a study of economic movements in Canada. It can give an indication as to monetary policy moving forward. If investors get an indication that there could be a change on the horizon CAD value can be effected.
Next up we have the BOC rate statement. This is used as a medium to keep investors informed on monetary policy decisions, specifically interest rates.
Following the rate statement we have the interest rate decision itself. I would be very surprised to see any change despite some very impressive unemployment figures of late. I think you would have to see consistent positive data releases and clarity over the NAFTA situation in order to see a hike.
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