The Canadian dollar dipped against its US peer on Thursday, as traders worried that the protectionist approach that US President Donald Trump has towards his nationâs economy might harm Canadaâs. Trump already took measures that signaled major upcoming changes to US economic policy.
Last Monday, Donald Trump started his first week of presidency by signing an executive order that formally withdraws the United States from the Trans-Pacific Partnership Agreement. The agreement, which includes Australia, Canada, Japan and a number of other countries, was signed by the United States but was never ratified.
Investors are now concerned about another trade agreement that Trump promised to renegotiate during his presidential election campaign; the North American Free Trade Agreement. The agreement, which was put in place in January 1994, ties the economies of Canada, Mexico, and the United States under a set of rules that defines trade and investment between them.
The government in Canada is concerned that changes to NAFTA will hit the nationâs economy hard, since the United States is Canadaâs largest trade partner. Prime Minister Justin Trudeau met with his cabinet in Calgary on Monday and Tuesday, in part to discuss Trumpâs administration and Canadaâs measures to face possible changes to NAFTA. The state of anxiety towards Trumpâs policy is weighing down the Canadian currency.
USD/CAD traded at 1.3103 as of 18:25 GMT, after touching 1.3127 at 13:10 GMT, the pairâs highest level for the day. USD/CAD opened trading at 1.3065.
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