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Bloomberg
The Canadian dollar reached its strongest level in four months as the nation joined the US and Mexico in a trade deal to replace the North American Free Trade Agreement.
The loonie appreciated about 0.8 percent and touched as strong as C$1.2787 against the greenback, while Mexico’s peso rose for a fourth day. The new trade deal will be called the US-Mexico-Canada Agreement, or USMCA, according to a joint statement from US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland.
“The Canadian dollar is reacting favourably because the agreement was seen harder to reach,’’ said Kengo Suzuki, chief foreign-exchange strategist at Mizuho Securities Co. in Tokyo. “The trade agreement will enable Canada to benefit from the buoyant growth in the US economy. With this, a global trade war is scaling down to the bilateral trade conflict between the US and China.’’
The deal involves improved access to Canada’s dairy market for US farmers, stronger intellectual property provisions, and tighter rules of origin for car production, according to two senior Trump administration officials who spoke to reporters on a briefing call on condition of anonymity. US President Donald Trump had threatened auto tariffs if a deal couldn’t have been reached.
“I’m not entirely sure anyone was expecting a deal before this deadline, so it’s not too surprising†to see the Canadian dollar rallying, said Viraj Patel, a currency analyst at ING Groep NV in London.