Swissquote Bank Research Team
Swissquote Bank Ltd
Canadian dollar bulls are celebrating. Renewed optimism on NAFTA has pushed USD/CAD lower, as US-Canada trade talks resumed yesterday. Both US President Trump and Canadian Foreign Minister Chrystia Freeland confirmed that negotiations are on track, with both ready to make concessions. USD/CAD continues to weaken amid stronger loonie against major currency pairs. The pair is heading along 1.3035 in the short-term.
Canadian negotiators appear willing to provide restricted access to its domestic dairy market in exchange for a broadening of the trade dispute settlement mechanism, along with cultural protection of Canadian media firms and finally steel and aluminium tariffs. Time is short: an agreement must be reached by end September, as the Trump administration will have to deliver a finalized agreement to Congress, including bilateral (with Mexico only) or trilateral terms, if agreement is found. Political support is at stake. Canadian PM Trudeau’s party strongly relies on Ontario and Quebec, where most dairy farmers are. Trump’s Republicans could face a reversal in November elections if no deal is settled.
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This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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