The U.S. dollar lost ground Monday against the other main currencies as President Donald Trump signed an executive order to withdraw the United States from the Trans-Pacific Partnership while promising to impose significant border taxes and renegotiate the North American Free Trade Agreement (NAFTA). Moreover, future Treasury Secretary Steven Mnuchin stated that a strong U.S. dollar could harm the economy in the short term. These comments appear to point to the new administration potentially abandoning the long tradition of supporting a robust U.S. dollar.
The Canadian dollar surged in trading yesterday further to reassuring comments from Stephen Schwarzman, strategic advisor to President Trump, regarding Canada’s role in possible NAFTA negotiations. Mr. Schwarzman stressed to journalists that the two countries have close and historic ties and that trade (imports vs exports) between Canada and the United States was “very much in balance.”
In the absence of major economic news on the agenda today, the USD/CAD pair will move primarily based on the tone of developments surrounding U.S. political news.
- Range of the day: 1.3225– 1.3325
Have a great day! Mark Donohue