The Canadian dollar lost a few fans this week when markets were shocked, shocked, by a news report that the US tipped Canada that it will put us on notice of its intent to withdraw from NAFTA. The White House followed up that report with a statement saying that the President’s view on NAFTA had not changed. Exactly. It’s the worst trade deal ever, remember?
Now the foreign exchange market’s attention will shift from trade matters back to capital flows, with the Bank of Canada still likely to raise interest rates a quarter-point next week. The Bank chose to put a very positive spin on its Business Outlook Survey, and give particular emphasis to results that showed the economy is running at full capacity. It’s not going to be scared off yet by some Donald Trump bluster.