Canadian Dollar Jumps Despite NAFTA Exclusion
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The Canadian dollar is rallying to finish off the trading week. The loonie is strengthening on higher energy prices and strong inflation numbers, but the currency’s gains may have been capped by President Donald Trump excluding Canada from the latest North American Free Trade Agreement (NAFTA) talks with Mexico.
On Thursday, speaking at a televised cabinet meeting, President Trump suggested that US trade representatives are purposely freezing out Canada from NAFTA talks. The administration’s trade negotiators are meeting with their Mexican counterparts in Washington, but Trump noted that the US is not in a rush to strike a deal with Ottawa.
We’re not negotiating with Canada right now. Their tariffs are too high, their barriers are too strong, so we’re not even talking to them right now. We’ll see how that works out. It’ll only work out to our favor. I’m in no rush. We want to make the right deal.
US Trade Representative Robert Lighthizer said that he is optimistic that there will be a “breakthrough” in the coming days, despite a myriad of issues to settle, which, he notes, is typical at the end of long talks.
But I think in this particular case the best alternative may be to get a good agreement. And I think there’s a possibility of that. I hope once we get one with Mexico then Canada will come along. I feel reasonably good about that.
A spokesperson for Canadian Foreign Affairs Minister Chrystia Freeland, Adam Austen, dismissed the claims, stating that their negotiating team is “in regular contact” with their counterparts.
On the economic front, the July consumer price index (CPI) advanced 0.5%, beating market forecasts of 0.1%. Earlier this week, the loonie surged on manufacturing sales rising 1.1% in June, national employment growing by 11,600 jobs, and national home prices edged up 0.8%.
Higher energy prices lifted the loonie on Friday. September West Texas Intermediate (WTI) crude oil futures tacked on $0.46, or 0.72%, to $65.92 per barrel.
The USD/CAD currency pair shed 0.72% to 1.3083, from an opening of 1.3156, at 15:48 GMT on Friday. The EUR/CAD slipped 0.27% to 1.4928, from an opening of 1.4967.
© AndrewMoran for Forex News, 2018. |
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Post tags: Canada, CPI, Crude Oil, Dollar, Donald Trump, EUR/CAD, NAFTA, Robert Lighthizer, USD/CAD
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