Reports that the White House at next week’s summit of the Americas in Peru wants to present a preliminary NAFTA agreement saw the CAD and MXN rise against the dollar yesterday on the more conciliatory tone of the US.
Reports that the White House at next week’s summit of the Americas in Peru wants to present a preliminary NAFTA agreement saw the CAD and MXN rise against the dollar yesterday on the more conciliatory tone of the US.
NAFTA Talks Continue Giving MXN and CAD Longs Hope
Ironically that came ahead of China taking a step into the trade war pits overnight by slapping tariffs on a multitude of items from America. Including sensitive big ticket itms like Boeing aeroparts and rural reliant soybean exports to China. The gloves are off.
This morning new economic spokeman for the White House Larry Kudlow said America doesnot want a trade war, NAFTA is close and the markets will like the deal. The current tone does mean the risk of the negotiations failing is easing but we have been here before.
Mexican Minister for the Economy and the Canadian Minister of Foreign Affairs are or the docket to meet with the US trade representative Robert Lighthizer today and tomorrow. Unless twitter is down than expect CAD and MXN volatility on posturing of a NAFTA deal.
Does China’s reaction temper Trump or does it fire up the demands of the “America First” approach. A deal must be reached by the end of April to ensure that it passes through the Mexican parliament before Mexico’s elections in July. Meanwhile expect higher vol, thin markets and a warranted risk premium for the Candian and Mexican currencies.