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NAFTA negotiations are suddenly taking on a more testy and combative tone in contrast to prior more constructive atmospherics, according to Richard Franulovich, Research Analyst at Westpac.  

Key Quotes

“Canada unwilling to yield concessions on dairy (though local politics could be at play with Quebec holding provincial elections October); while USTR Lighthizer has renewed threats to forge ahead on a new NAFTA pact without Canada.”

“The economy is still performing well. Recent data highlights include smaller trade deficits, still healthy full-time employment and a stabilisation in property values.”

“NAFTA cancellation risks remain the wildcard but absent that, BoC tightening and solid growth are key supportive pillars for CAD and argue for USD/CAD trading solidly below 1.30.”