Canadian Dollar Trades Higher As U.S. Decides To Proceed With NAFTA
27 April 2017 - 05:31AM
RTTF2
The Canadian dollar traded higher against its major counterparts
in the Asian session on Thursday, as the Trump administration
decided to remain in the North American Free Trade Agreement,
soothing worries over reports of U.S. abandoning the deal.
The White House reported that Trump is planning to continue with
NAFTA deal and the U.S. President would renegotiate the terms of
deal with the leaders of Mexico and Canada to benefit all three
countries.
"It is my privilege to bring NAFTA up to date through
renegotiation," Trump said in a statement. "It is an honor to deal
with both President Peña Nieto and Prime Minister Trudeau, and I
believe that the end result will make all three countries stronger
and better," he added.
Further supporting the currency was a recovery in Asian stocks,
which fell modestly after Trump's tax plan disappointment.
The loonie was lower against most major rivals on Wednesday, as
oil prices fell after a data showing large build in U.S. oil
inventories.
The loonie rose to a 2-day high of 1.3530 against the greenback,
from an early more than a 1-year low of 1.3647, and held steady
thereafter. The loonie is seen finding resistance around the 1.33
region.
The loonie that ended Wednesday's trading at 81.51 against the
the yen climbed to 82.21. Continuation of the loonie's uptrend may
see it challenging resistance around the 84.00 level.
The Bank of Japan kept its monetary stimulus unchanged as widely
expected.
Governor Haruhiko Kuroda and his board members decided by an 7-2
majority vote to hold its target of raising the amount of
outstanding JGB holdings at an annual pace of about JPY 80
trillion.
The loonie strengthened to 1.0125 versus the aussie, from a low
of hit at 1.0199 at 9:30 pm ET. If the loonie extends rise, 1.00 is
likely seen as its next resistance level.
Reversing from an early 2-day low of 1.4892 against the euro,
the loonie edged up to 1.4755. The loonie is likely to locate
resistance around the 1.44 region.
Looking ahead, Eurozone economic confidence index for April is
due in the European session.
The European Central Bank announces its decision on interest
rates at 7:45 am ET. The bank is expected to keep its refi rate at
zero percent and the deposit rate at -0.4 percent.
At 8:00 am ET, German flash inflation for April is set for
release.
In the New York session, U.S. weekly jobless claims for the week
ended April 22, advance goods trade balance, wholesale inventories,
durable goods orders and pending home sales - all for March are
due.
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