The neighboring CAD is currently dipping on the market as news around the North American Free Trade Agreement surfaces. According to recent news, President Donald J. Trump is looking to successfully pull the U.S. in the NAFTA, both local stocks and currencies were stumbling as the news gain more traction and analysts fear for the immediate effects.
The Mexican peso is also reportedly decreasing as the NAFTA news abruptly takes the market. Reports revealed that President Trump is looking to withdraw the U.S. in the NAFTA and would then, in return, help the local trade deficit.
Furthermore, more than the currencies, the local Canadian stocks such as the S&P/TSX composite index were also suffering a bearish market as the NAFTA news continues. The sector took a massive beating as the area is populated with auto parts makers.
Headlining today’s NAFTA debacle is the Canadian dollar and Mexican peso dipping to relatively low and worrying levels; the Canadian dollar was last seen trading at a dip of about 0.91% at 1.2575 per dollar. On the other hand, the Mexican peso was also down incrementally as the NAFTA news exploded, the peso dipped by 0.85% at 19.4034.
Moreover, the local stock S&P/TSX composite index was also dragged down to an abysmal level, losing a massive 711.29 points to 16,247.95 on the same trading session. The stock was heavily weighed down by the industrial sector’s weak performance.
General Motors Co. has been massively hurt by the trade agreement conundrum; dropping by a massive 2.4%. The auto company has been massively investing in its Mexican manufacturing facilities which are around 14 in total.
According to recent reports, the Canadian government has been rumored to fully believe that the U.S. will truthfully and eventually pull off of the NAFTA. The recent six-month notice is required for the country to fully leave the trade agreement. Trump has been unwaveringly putting their involvement on the ropes as he seeks “changes” within the agreement.
Reports also revealed that the officials of NAFTA are expected to hold a sixth and penultimate round of negotiations; the meeting is expected to be held in Montreal, and the duration is also speculated to be held somewhere around January 23-28.
President Trump calls and believes that the 1994 treaty is a perilous deal that is hurting American workers. Furthermore, the President and his team have been setting up proposals that have “alarmed” the Canadian and Mexican counterparts.
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