- September 28, 2018
- Posted by: Trading
- Category: Market Overview
The Canadian dollar rose on Friday after the monthly gross domestic product (GDP) beat the forecast with a 0.2-percent gain. The is up almost 1 percent on the final day of the trading week. The currency is still showing a weekly loss against the greenback as NAFTA uncertainty and the U.S. Federal Reserve rate announcement put downward pressure.
The rise today comes with higher expectations of a Canadian interest rate lift in October. The Bank of Canada held rates in September ahead of a highly anticipated Fed rate hike in September that came to pass. The U.S. central bank has forecasted another rate hike in 2018 and 2 or 3 more next year as part of its economic projections published Wednesday.
BoC Governor Stephen Poloz spoke on Thursday addressing the rising inflation and Friday’s GDP data point puts a rate hike firmly on the table in the short term.
USD/CAD for Sept. 28, 2018.
NAFTA negotiations have not made big inroads as the U.S. met with Canada with the goal of turning two bilateral agreements into a trilateral one.
With a considerable amount of work still to be done in bridging the gap between U.S. and Canada, the U.S.-Mexico agreement will be published tonight with a possibility of leaving the door open for Canada to join.
It is that possibility that has kept the loonie gaining despite the NAFTA train moving without Canada.
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