The North American Free Trade Agreement (NAFTA) is currently in the process of being renegotiated. The agreement between the US, Mexico and Canada has been described as the worst trade deal in history by President Trump.
Canada are currently being frozen out of talks as Mexico and the US thrash out a deal. This may not necessarily be a bad thing for Canada. Separate trade deals between the US and Canada and the US and Mexico could be a good scenario. If however the intention is to keep NAFTA intact this could put Canada in a weak position in negotiations.
Brian Cowley, MD of the Macdonald-Laurier institute stated “They’re going to clearly strike a deal with Mexico and say to Canada, are you in or you out?”
Despite the uncertainty surrounding the NAFTA deal the Pound still suffers against the Canadian Dollar. The possibility of a Brexit “no deal” is still out there.
The UK’s International Trade Secretary, Liam Fox has stated he believes there is a 60% chance of a “no deal” Brexit. The UK Government are also releasing a series of advisory notes to the public on Thursday aimed to help in the event of no deal agreement. This does not bode well for the Pound and I am afraid to say we could potentially see further losses for Sterling.
If you have to make a transfer in the short term, buying Canadian Dollars with Sterling tomorrow may see an opportunity. There is expected to be a significant fall in Canadian retail date which may create a small Spike in Sterling value. If you would like to keep track of live interbank exchange rates click here.
Apologies for my pessimism, but I personally feel that there is very little reason to be optimistic in regards to the Pound at present.
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