What started last week as a data and OPEC-driven rally has become something of a rout, with the Canadian dollar battering other currencies again on Monday following news that Canada and the United States, together with Mexico, have finally agreed a trade deal.
The Canadian dollar is soaring following news that Canada and the United States, together with Mexico, have agreed a trade deal.
“Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st century: the United States-Mexico-Canada Agreement (USMCA),” US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement.
“USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. It will strengthen the middle class and create good, well-paying jobs . . . for the nearly half-billion people who call North America home,” the officials said.
In the markets, Monday morning’s gap-and-go put the loonie up 3 percent against the euro in as many days, up nearly 4 percent against the Swiss franc within the same period, and up by an average of 2 percent against the US and Australian dollar currencies. As far as three-day measures go, this is the fastest rate of Canadian dollar appreciation seen in recent years.
In terms of milestones, USD/CAD, the most important of all Canadian dollar exchange rates, struck a four-month low (Canadian dollar high) on Monday as it tumbled into the high C$1.27s. As recently as Thursday, it had been threatening C$1.31. As of writing, a pause in the decline, perhaps only temporary, had the pair trading at C$1.281.
With the mood buoyant, the safety-first Japanese yen fell to a ten-month low and crude oil—a product which Canada exports in great quantities—rallied to a three-month high.