Nafta decision: timing is key
An article on PoundSterling here indicates that the future direction of CAD may largely be held in the balance by the timing of the impending NAFTA decision.
They note that a key deadline for a NAFTA deal to be agreed is the 1st of May as that is when the current exemption on steel and aluminium tariffs is set to expire. If a deal is reached by then CAD would be supported and they note 1.2062 as a likely near term target.
By contrast, if the 1st of May deadline passes and no deal is reached then the tariffs will apply and CAD would be sold off. They note the 1.29-1.30 region as potential upside targets.
So, it is necessary to factor in the timing of these NAFTA agreements as well as the potentil for any rate hike in May to get a confident path of the USD/CAD over the coming weeks.
