Over the past couple of weeks, the Canadian Dollar has experienced both the highs and lows of the market. It previously held the title of best performing currency out of the major world currencies but has now ceded this to the Pound Sterling. CAD also is coming off the back of some poor jobs data which was released last Friday. This has weighed heavy on CAD since, but it looks to be on the rebound following some positive news coming out of the USMCA deal.
USMCA Agreement Has Been Signed, Positive News for the Canadian Dollar
The Canadian Dollar celebrated yesterday, as the United States announced that the long-awaited USMCA agreement has finally been officially signed. CAD has been tipped by economists to continue trending in a desirable manner. The US trade representative highlighted that he had officially signed an update in the North American Free Trade Agreement this Tuesday. President Trump had previously described the deal as ‘the worst deal in history’. The update in the agreement will see an end to the uncertainty surrounding the trade pact’s future.
Canadian Dollar Loses Its Best Performer Crown to the Pound Sterling
Throughout the year, CAD has held the title of the best performing currency out of the major currencies in the trading market. But news broke that the crown had shifted over to GBP during Tuesday afternoon amid fresh pre-election gains. On Tuesday, CAD did perform better than its ’risk’ rivals but failed to edge upon currencies like the Yen, Swiss Franc and the Dollar. Price action in the international markets are heavily relying on the uncertainty over the US-China trade talks. The talks are significant for the Canadian Dollar outlook as the Bank of Canada has stated that it will set its domestic interest rates based on the impact that the ongoing tariff battle is having on Canada’s sources of economic resilience, household spending and house building.
For GBP, its fortune could be made or lost on Thursday depending on which way its public decides to vote in the general election. The outcome which is likely to be known by the early hours of Friday morning, is likely to have a huge impact on both the GBP and any currencies that interlink with it like the Canadian Dollar. For CAD, it will continue to oversee the US-China trade talks before deciding on its future monetary policy.
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