Trade battles, low oil prices, contribute to decline in value
The escalating trade battle between Canada and the United States hammered the Loonie today, dropping it to a 14-month low against the US Dollar.
In mid-day trading, the Canadian dollar had fallen to 1.3616 per USD, the lowest level since February of 2016.
As macro strategist Bipan Rai told Bloomberg, “Protectionist tariffs weren’t in the price for the Canadian dollar and the Mexican peso had priced it out. Ahead of the Nafta negotiations, markets have become somewhat more sensitive that talks won’t be as smooth as expected previously.”
The Canadian dollar is now down 1.2% on the year.
The Mexican Peso also fell to 18.9250 vs the US Dollar – its lowest level in almost a month.
As the Trump administration moves simultaneously on softwood lumber, Canadian dairy, and NAFTA renegotiation, the Trudeau government is under intense pressure.
So far, the economic approach taken by Trudeau has put Canada in a dangerously weak competitive position, and the government shows no sign of changing their misguided course.
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