As the negative sentiment surrounding the Canadian Dollar continued over the weekend, USD/CAD yesterday morning hit a high of 1.3125; its highest level since late June. GBP/CAD hit 1.83; its best level since the EU referendum 20 months ago although both AUD/CAD and NZD/CAD slipped a little from their recent 9-month highs. By the middle of the New York afternoon, however, USD/CAD had fallen around three quarters of a cent, though this was more a reflection of a poor session for the US Dollar than any new-found enthusiasm for its northern neighbour.
In its latest report on Canada, credit ratings agency Moody’s warns that while the end of NAFTA would be worse for Canada than for the US, the impact on Canada's overall economy would be "marginal" – although there would be winners and losers in terms of different industries and regions of each country. It identified New Brunswick and Ontario as having the highest exposure in terms of trade with NAFTA partners based on their output and export mix and said that of all the provinces, New Brunswick's exports to the US account for the largest share of its gross domestic product — nearly 30 per cent overall — with "significant exposure to higher-risk" food, agricultural commodities and forestry sectors. Meantime, Ontario exports more to the U.S. than any other province, largely because of its significant exposure to the manufacturing industry, including the auto sector. Despite these concerns, Prime Minister Justin Trudeau sounded quite upbeat on Monday: “We’re renegotiating NAFTA, we’ve seen from the President he’s enthusiastic about getting to a deal,” he said during a panel discussion, adding that Canada was continuing to work on resolving the trade talks.
Most of the important Canadian events come at the end of this week. On Thursday afternoon Senior Deputy Governor Carolyn Wilkins is scheduled to speak whilst on Friday we have retail sales and CPI numbers. Before then, wholesale trade numbers are released today. The Canadian Dollar opens in Asia this morning at USD/CAD1.3070, AUD/CAD1.0085 and NZD/CAD0.9475.