(Luke Kawa – Bloomberg)
Fears among Canadian officials that the U.S. is getting closer to ripping up the North American Free Trade Agreement caused traders to rapidly reassess next week’s Bank of Canada decision.
The market-implied odds of a hike initially slumped to 57 percent from 77.5 percent. Then, they spiked above 80 percent as White House officials denied that President Donald Trump’s position on the matter had changed – only to slide back to 62 percent. All in little more than an hour. The chances now stand around 75 percent.
But don’t let those wild swings fool you: there are signs of complacency in the currency market about what’s in store for the Canadian dollar ahead of the Jan. 17 central bank decision. Click here to read more.
- NAFTA Supporters Use Stock Market to Try to Dissuade Trump From Withdrawing From Trade Deal (NYT)
- U.S. Dollar Will Get Slammed if NAFTA Dies, Analyst Jens Nordvig Says (CNBC)