USDCAD moves higher on the news
- Canada plans to stay at negotiating table even if Trump says he is polling US out of NAFTA has some talks would continue
- Trump notice of withdrawal would be significant but US-Canada trade would continue
- Canada said to prepare contingencies for the withdrawl
The USDCAD is moving higher on the news. It trades above 1.2550. The pair broke above the 200 hour MA at 1.2492 in the process (was a ceiling) until the news (see 5 minute chart below).
Looking at the hourly chart, the 38.2% of the move down from the Dec 19 high comes in at 1.25702. that is the next target.
Does the US pull out take the BOC out of the picture in January due to uncertainty? It could. The OIS market is still projecting a 82.7% chance for a hike at the next meeting.
Earlier today, there were reports that Canada had launched a wide ranging trade dispute against the US. I am not sure they would have done that if they were "bullish" on NAFTA.
As most people know, if you kick Trump, it does not take long for a response. Canada seems to think they can see the writing on the wall and are preempting the tweets to come....
The Reuters headlines are being attributed to "Government Sources". The official speaks on condition of anonymity.
