- Dollar rallies as NAFTA hopes for 2018 slip away.
- US deadline for May 17th agreement slips by as Mexico heads for an election.
The USD/CAD is the big mover of the Asia session for Friday, climbing to 1.2846 on NAFTA headlines in the overnight session. The pair is back into 1.2830 as of writing, but the pair is decidedly bullish to end the week.
The US Dollar is getting propped up on NAFTA headlines today, as renegotiations failed to produce a workable agreement by the US' self-imposed Thursday deadline. Chances of a successful NAFTA closure for 2018 are looking slim as Mexico gears up for a Presidential election, and the incoming President of Mexico is likely to shake up the entire negotiating team, bringing the entire process to a grinding halt. As FXStreet's own Ross Burland pointed out earlier, "President Trump can’t just sign it into law because the U.S. Constitution gives Congress, and not the President, power to regulate commerce with foreign nations - so there are plenty of hurdles along the way through Congress under the trade promotion rules before anything can be signed off and agreed, hence why House Speaker Paul Ryan calculated that lawmakers would need to see a deal by TODAY in order to be able to vote on it this year."
The Loonie is waffling against the US Dollar on the news, as a lack of solid trade agreements leaves Mexico and Canada exposed to trade-shriveling tariffs and levies on import/export goods and services, which would hamper manufacturing and economic growth across the North American continent.
USD/CAD levels to watch
Friday sees CPI and Retail Sales figures for Canada, and as James Chen, CMT noted, that could set the pair's direction looking forward: "USD/CAD is generally still in the midst of a pullback from last week's high just short of the 1.3000 handle, a key resistance level. In the process, the currency pair has dropped back below its key 50-day moving average. The next directional move for the pair will be driven largely by Friday's Canadian data releases, crude oil prices, and whether the US dollar remains in surge mode or begins to lose momentum. As the US dollar has been technically due for a pullback, any stronger-than-expected Canadian data on Friday could result in a further drop for USD/CAD. In this event, the next major downside support barrier lies around the 1.2700 area. Any breakdown below 1.2700 could open the way for further downside towards the 1.2526 low of mid-April."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.