The Canadian Dollar topped our one-day performance table for a second consecutive day on Wednesday. Prior to the FOMC Statement, USD/CAD was already back below 1.30 for the first time since last Thursday with a one percent daily drop whilst EUR/CAD and NZD/CAD were both down six-tenths and AUD/CAD was three-tenths lower at 1.0020. Post-Fed, USD/CAD extended its losses and was down almost 1 ¼ percent on the day, moving back on to a 1.28 ‘big figure’ for the first time in over a week. This morning in Europe, USD/CAD has fallen even further, hitting a low around 1.2850 and though there are another 8-9 hours before close of business, it is on track for a third day at the top of the table.
Prime Minister Justin Trudeau reiterated his belief there will be agreement on a renewed North American free trade deal between Canada, Mexico and the United States. Trudeau didn't offer any timeline when questioned about the negotiations on Wednesday, only saying he believed a deal is eminently possible. “We are there working very, very hard and moving forward on trying to get a good deal. We know that there is a good deal eminently possible for Canada, for the U.S. and for Mexican citizen and workers.” According to Bloomberg, there are indications the U.S. is willing to budge on one of its core demands as President Donald Trump pushes to get a deal ahead of looming Mexican elections. One person familiar with the talks, speaking on condition of anonymity, said the Americans are showing flexibility on a demand for a 50 percent, U.S.-specific content requirement, but it hasn’t been formally withdrawn.
Canada’s ambassador to Washington, David MacNaughton, told reporters the U.S. has made suggestions on auto rules that “were actually quite creative” and, if taken “to their logical conclusion,” would eliminate the need for the 50 percent requirement. The Globe and Mail newspaper, citing unidentified sources, reported the U.S. had altogether dropped its demand for 50 percent U.S. content in vehicles. Away from the twists and turns of NAFTA, Bank of Canada Senior Deputy Governor Carolyn Wilkins will deliver a speech today, while domestic inflation data for February is due on Friday. The Canadian Dollar opens in North America at USD/CAD1.2875, AUD/CAD0.9950 and GBP/CAD1.8210.