The Canadian dollar rose sharply today after the news that Canada will join the trade agreement with the United States and Mexico after all. The currency opened sharply higher and proceeded to move up.
Just when it looked like Canada will be left out of the US-Mexico trade agreement, politicians managed to find a consensus. The new United States-Mexico-Canada Agreement will replace the old North American Trade Agreement. Under the new rules, Canada will open up its dairy market to US farmers and there will be more incentive to move auto production to the USA.
US President Donald Trump praised the deal:
Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico. The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many……
— Donald J. Trump (@realDonaldTrump) October 1, 2018
Yet there were detractors. In Canada, President of Dairy Farmers of Canada Pierre Lampron complained:
Granting an additional market access of 3.59% to our domestic dairy market, eliminating competitive dairy classes and extraordinary measures to limit our ability to export dairy products will have a dramatic impact not only for dairy farmers but for the whole sector.
In the USA, Jeffrey Rosensweig, a business professor at Emory University, questioned whether the concessions were worth it:
We have really hurt relationships with our major ally … for the sake of a few gallons of milk
USD/CAD dropped to 1.2805 as of 12:19 GMT today after closing at 1.2903 on Friday and opening at 1.2846 at the current trading session. EUR/CAD closed at 1.5177 on Friday, opened at 1.4923 on Monday, and fell to 1.4862 later. CAD/JPY closed at 88.04, opened at 88.45, and rose to 88.97, touching the daily high of 89.13 today — the highest level since February 2.
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