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Canada joins new Nafta deal with US and Mexico

The Canadian Dollar soared on the news of a new trade agreement with America.

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Over the weekend, Canada signed an agreement with the US and Mexico as part of a new North American Free Trade Agreement (Nafta), just hours before the deal had to be with Congress. Subsequently, the Canadian Dollar reached a four-month high of $1.2814, having jumped by nearly 0.7 per cent.

Today, the UK will release its manufacturing data. Analysts expect a slight contraction in the Purchasing Managers’ Index (PMI) for the sector from 52.8 in August to 52.5 in September. If the index contracted at a faster pace, that will weaken the Pound further.

Finally, focus will then shift to Federal Reserve (Fed) member Raphael Bostic who is due to speak later today. Economists will await clues to the Fed’s monetary policy path in the short-to-medium term. Any pivot to a hawkish rhetoric will drive the Dollar higher.

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