CAD and MXN Rise After NAFTA Reported Comments

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.

The optimism also around the North American talks comes as the U.S. is set to levy a whole slew of tariffs against China on Thursday.

usdcad Canadian dollar graph, March 21, 2018

What is being discussed on the North American auto sector was not clear, but trade experts do not believe the U.S. has backed off on its demand for more U.S. content though it may have altered it.

U.S. Trade Representative Robert Lighthizer, during congressional testimony Wednesday, said a “great deal of progress” has been made on NAFTA but there’s still “a ways to go.” He also said he is working closely with the auto industry to bring jobs back to the U.S. from Mexico. He added that the objective is to get more U.S. content into vehicles, which boosts Canadian parts as well.

The Canadian dollar rose 0.8 percent, to 1.30, and the peso gained nearly 0.9 percent, to 18.60.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza