The Canadian dollar and the Mexico peso rose on optimism that the U.S. may be softening some of its hard-line stance in the renegotiation of the North American Free Trade Agreement. A report in the Globe and Mail said that the U.S. dropped demands for the inclusion of 50 percent U.S. content in automobiles, which is seen as the most contentious issue in the talks. Prime Minister Justin Trudeau also said Wednesday that he remained optimistic Canada would get a good deal in the NAFTA renegotiation.
With the US dropping a large amount of tariffs against China this week, the US prospected that a 25 percent tariff would be dropped from mexico on import steel and aluminum. This is causing the Canadian dollar to rise to 1.30 and the peso to rise 18.60. NAFTA still has a long way to go, but this is a step in the right direction.
With this being said, these renegotiation's are causing some volatility between NAFTA and the US. Although, US withdrawal is unlikely, there is always a potential threat of the US looking for its best interest.
ALWAYS CITE your sources. Patti Domm and CNBC would not be happy to find anyone copying their material UNLESS it were nicely credited. But the NEWS is indeed really interesting after all of the roller-coaster predictions we've seen and heard over the last year. The Canadian dollar CAD and Mexican peso MXN are continuing to strengthen as the dollar weakens.
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