The Canadian dollar faced wild ups and downs on Wednesday after Republican Donald Trump became the newest president of the USA, which triggered fears toward the future of economic relationships between Canada and its biggest trading partner.
Trumpâs victory in the US presidential election came as a shock since markets saw a bigger probability for Hillary Clinton to win, especially after an investigation into her email case ended after no evidence of criminal activity was found. The shocking victory for her rival hit the Canadian currency hard as investors digested the victoryâs consequences, one of which might be ending or changing the North American Free Trade Agreement.
NAFTA has been a long standing trade agreement between Canada, Mexico, and the United States. However, Donald Trump repeatedly said that this agreement was nothing but a disaster for the US economy. Trump promised that he will renegotiate its terms if he is brought to office as a part of his endeavors to bring jobs back to the American homeland and limit the transfer of US companyâs operations to other countries.
Nonetheless, Trumpâs victory speech calmed anxious investors as it did not contain any mention of the free trade agreement. This, coupled with steady crude oil prices today, helped the Canadian currency regain for some of its sharp losses against the British pound.
GBP/CAD traded at 1.6641 as of 20:19 GMT after touching 1.6962 at 05:07 GMT, the pairâs highest level since October 6. GBP/CAD had a lot of volatile movement today with trading levels ranging between 1.6406 and 1.6962 after it opened the day at 1.6442. USD/CAD touched 1.3368 after moving to 1.3525 at 05:05 GMT, the strongest trading point since February 29. The pair opened today at 1.3287.
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