US Commerce Secretary Wilbur Ross has been speaking about exchange rates, stating that he doesn’t believe Canada or Mexico are currency manipulators.Since Trump won the election there has been several accusations from the new administration aimed at other countries for manipulative their exchange rate. Ross also has said this afternoon that NAFTA needs updating with a re-provisioning of the rules of origin and that NAFTA may help strengthen CAD and MXN.
Whilst these comments seem throwaway in nature they could hold some weight with worries surrounding trade between the US and Canada and Mexico seeing particular weakness in the peso during Trump’s election campaign and shortly after his victory.
The USDMXN has fallen back to trade close to its lowest level in a year
As for the Canadian dollar the Loonie rose strongly last week as hawkish rhetoric from the BOC supported the recent uptick in data.
The Canadian dollar has risen firmly against the JPY, CHF, EUR and USD in the past week
This Friday sees inflation and retail sales data from Canada released in what could be one of the main events this week. Technically the CADJPY pair could be interesting to watch as the market is testing a potentially key level as well as being the biggest riser of CAD crosses in the past week. Price is now probing the 200 day SMA and if it closes at the present level this would represent its highest close in 3 months.
CADJPY is testing the 200 day SMA. If price ends today around current levels it would mark the highest daily close in 3 months.