We have seen further weakness for the Canadian Dollar during trading today following on from the Bank of Canada Governor Poloz offering a fairly dovish view on the economy in a speech last night.
The NAFTA agreement or more importantly the uncertainty behind it is starting to weigh heavily on business confidence in Canada, along with the continued strength of the U.S Dollar which is also leading to the Canadian Dollar weakening.
The rise for U.S treasury 2-year notes compared to Canadian 2-year notes is now at the widest margin since the Bank of Canada took an extremely positive stance about their economy and potential interest rate hikes back in the summer of 2017.
With Donald Trump being directly involved in the NAFTA issue it does make the Canadian Dollar rather difficult to predict, as we all know that we are only one tweet away from the market becoming fairly volatile, which way does depend on what Trumps thoughts are at any one given time.
I personally still feel that Canadian Dollar exchange rates may get a little worse before they get better, not just due to NAFTA but due to oil prices and a slightly shaky run of economic data in recent months.
The rest of the week is fairly quiet for economic data releases from Canada, but as we all know that does not mean that the Canadian Dollar will remain steady, being a currency that is impacted by so many different variables.
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