The Canadian Dollar started Monday’s European session on a roll with the Canadian Dollar to US Dollar (CAD/USD) exchange rate climbing by around 0.79%. The Canadian Dollar to Pound (GBP/CAD) exchange rate also climbed by around 0.25%. The move was inspired by the US and Canada agreeing on a revised version of the North American Free Trade Agreement (NAFTA).
The new deal is reported to be named the United States-Mexico-Canada Agreement, or USMCA.
Head of the Organisation of Economic Cooperation and Development (OECD) Angel Gurria commented:
‘Today’s announcement supports strong growth and good jobs in all three countries; it will boost the confidence of firms and investors by preserving stable and predictable rules-based trade in North America. It will make the region more productive and more competitive internationally.’
Canadian Manufacturing Data Falls
However, despite the positive trade situation, Canadian domestic data disappointed. The Canadian RBC Manufacturing Purchasing Managers’ Index fell in September, coming in at 54.8 after the previous month’s 56.8. The data showed the slowest pace of expansion this year and the third consecutive decline. The ecostat was hindered by friction between nations and global trade tensions. However, with today’s resolution between the US and Canada, there could be the opportunity for the data to improve moving forward.
CAD/USD, CAD/GBP Exchange Rate Forecast
There’s some interesting economic readings still to come in the week ahead, with the latest Canadian Unemployment Rate and Net Change in Employment figures scheduled. Friday could be an interesting day for the US Dollar as well, with the latest US Change in Non-Farm Payrolls stat being released. The September forecast suggests 185K more people could be in work, after the previous month’s 201K. Average Weekly Earnings data will also emerge.
For the UK, services and construction data will emerge later in the week which could create some GBP market movement. The Pound has remained buoyant against a host of majors today, and the latest Markit Manufacturing Purchasing Managers’ Index has come in above forecasts in September. Economists expected 52.5, yet August’s figure was positively revised higher and September’s figure came in at 53.8.
The Canadian Dollar to US Dollar (CAD/USD) exchange rate is trending at 0.7804. The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is trending at 0.5973.