The Globe & Mail is out with a somewhat optimistic report on the Canadian trade situation and, in turn, the Canadian dollar. It highlights trade negotiations that are currently ongoing between the US and Canada, and appear to be in the final stretch.
It says:
- Canada would address a long list of US trade irritants in exchange for sectoral tariff relief
- Canada woudl remove retaliatory tariffs on teh US, return US alcohol to shelves and agree “to Washington’s interpretation of how dairy quotas should be allocated”
- In return the US would lower stariffs on steel and aluminum (not entirely remove)
- The deal would be an interim deal
- Discussions include aligning external tariffs on certain Chinese goods
Canada faces 50% tariffs on August 19 and that’s the deadline both sides are working against. If Canada can get some trade certainty, there’s a big possible tailwind for the loonie in the later half of the year. Today’s jobs report from Canada also highlights the resilience of the domestic economy. USD/CAD is down 70 pips to 1.3941 today, the lowest since mid-June.
This article was written by Adam Button at investinglive.com.