The Canadian dollar rose against the US dollar to post small gains on Wednesday, as the Canadian currency reversed its direction after the release of Canadian housing starts data. The Canadian dollar has been under pressure from President Donald Trumpâs protectionist approach in the past days.
President Trump, who has been in position for just a few weeks, raised investorsâ concerns after announcing that he intends to fulfill his promise of revisiting the North American Free Trade Agreement. The agreement, which includes Canada and Mexico, controls the movement of goods and services in North America, and any major changes to it can greatly harm Canadian exports.
The NAFTA agreement, which was described by Trump as a catastrophe for the U.S. labor market and business environment, has been in place for over 20 years. During these two decades, the United States held the position of the largest trade partner of Canada. The president also plans to review trade relationships with other major partners of the United States, including China and Japan.
However, investors are hopeful that Trumpâs wrath on NAFTA is directed more at Mexico than Canada, but until further clarity is offered by the US president, uncertainty will weigh down the Canadian dollar.
Canadaâs dollar still rose today as housing starts in the nation remained strong in January. Canada Mortgage and Housing Corporation released a report earlier today that said that new housing starts rose to 207,408 units in January, from 206,305 units in December 2016. The data exceeded analystsâ expectations of 202,000 units.
USD/CAD traded at 1.3155 as of 20:30 GMT, after touching 1.3142 at 16:00 GMT, the pairâs lowest level for the day. USD/CAD opened trading today at 1.3192.
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