Forex
USD/CAD Exchange Rate Touches Three-Month Low Ahead of Trade Deal
A Canada-U.S. trade deal is reportedly nearing completion, but the Canadian dollar has already priced in some of the expected benefits.
The USD/CAD exchange rate touched a three-month low on August 20 at 1.3757, before the final terms were announced.
According to reported proposals, the U.S. would cut its headline tariff on Canadian steel and aluminium from 50% to 25%, and lower the auto tariff from 25% to 15%. However, these reductions may not be enough to cause a significant surge in the Canadian dollar if they match market expectations.
The Bank of Canada's daily average exchange rate has been falling since July 27, while U.S. crude futures rose about 2% to $87.50 a barrel on Thursday, supporting the Canadian currency.