TheÂ Canadian dollar is nearing its best level inÂ three months asÂ investors are hopeful that aÂ new trade deal can be reached with theÂ US andÂ Mexico. After President Donald Trump andÂ his administration announced aÂ new trade pact with Mexico, theÂ White House confirmed it will now concentrate its efforts onÂ Canada, hopefully coming toÂ aÂ trilateral arrangement before theÂ midterm elections inÂ November.
OnÂ Monday, theÂ US andÂ Mexico reached aÂ deal that will last 16 years andÂ require aÂ review every six years. Some ofÂ theÂ highlights ofÂ theÂ agreement will include theÂ elimination ofÂ caps onÂ imports Mexican light vehicles, aÂ certain amount ofÂ North American steel andÂ aluminum consumption, theÂ strengthening ofÂ intellectual property, andÂ greater purchases ofÂ US agriculture.
TheÂ deal will be sent toÂ congress forÂ approval. It needs toÂ be given theÂ OK inÂ 90 days.
US Treasury Secretary Steven Mnuchin said that he thinks Washington can reach aÂ trade deal with Ottawa this week. Canadian Foreign Affairs Minister Chrystia Freeland is traveling toÂ Washington toÂ continue negotiations â her office said Canada will only sign aÂ pact that benefits theÂ country.
Canada sends 75% ofÂ its exports toÂ theÂ US, so its economy will receive aÂ boost if aÂ trilateral deal is made.
President Trump said that his trade representatives are willing toÂ negotiate, but only if Canada is fair. If not, then, theÂ president said, Canada can expect more tariffs, particularly onÂ automobiles.
Weâre starting negotiations with Canada, pretty much immediately. If theyâd like toÂ negotiate fairly, weâll do that.
TheÂ easiest thing we can do is toÂ tariff their cars coming inÂ â¦ It could end inÂ one day andÂ we take inÂ aÂ lot ofÂ money theÂ following day.
Bank ofÂ Canada (BOC) Governor Stephen Poloz uttered optimistic remarks during last week’s Jackson Hole retreat, stating that aÂ new trade pact will likely be met based onÂ recent developments.
TheÂ loonieâs gains were capped byÂ falling energy prices asÂ October West Texas Intermediate (WTI) crude oil futures slipped 0.11, orÂ 0.16%, toÂ $68.81 per barrel onÂ theÂ New York Mercantile Exchange.
TheÂ USD/CAD currency pair tumbled 0.42% toÂ 1.2912, from anÂ opening ofÂ 1.2969, atÂ 15:21 GMT onÂ Tuesday. TheÂ CAD/MXN rose 1.01% toÂ 14.624, from anÂ opening ofÂ 14.473.
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