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The Canadian loonie failed to gain following the recent signing of the US-Mexico-Canada trade agreement. This opened the door for Japanese yen traders to utilize trade war uncertainties to pull the CADJPY pair lower in the coming sessions. As the Canadian dollar struggles to gain traction, the pair is now widely anticipated to hit its support levels just below the ¥82.000 before 2020 starts. Just yesterday, the long-awaited USMCA trade deal has finally been inked, giving the loonie a short-term boost. But only a day after, the effect has already run out. United States Trade Representative Robert Lighthizer announced yesterday the update on the North American Free Trade Agreement, which ironically US President Donald Trump dubbed as the “worse deal in history.” The said agreement has been previously renegotiated by Trump back in the 2016 presidential election campaign period.
The kiwi momentarily eases after the boost in fiscal spending by the New Zealand government. Just recently, New Zealand’s Minister of Finance, Grant Robertson, announced a $12 billion, or roughly more than 18 billion New Zealand dollars, in the country’s spending funds. Although the increase in spending could be a double edge sword for the kiwi as it lessens the pressure on the Reserve Bank of New Zealand to aggressively ease its rates. The massive amount will be lent to investments on infrastructures and help maintain its gross domestic product growth. But the NZDCAD is still expected to climb up before 2020 starts as the New Zealand dollar feeds off on the reports that suggest that US President’s scheduled tariff hike on December 15 may be delayed. The US Secretary for Agriculture Sonny Perdue said that he doesn’t believe that Trump’s tariffs will be implemented on schedule.
As officials close to the situation and the media suggest a delay in the US president’s December 15 tariff implementations, signs are beaming for the USDBRL to rebound in coming sessions. What helped reel lower the pair this December is the slight notable improvements in Brazil’s economy after its GDP report showed figures of gradual progress in Brazil. Earlier this week, Brasilia’s Consumer Price Index for November went up from 2.54% to 3.27% on a year-over-year basis. And its gross domestic product for the third quarter pick up to 1.2% from 1.0% also on a year-over-year basis, much faster than what experts projected prior to its release. The real peaked to its strongest level after investors started buying the currency following the record-breaking lows in late November. However, it is believed that the real still lacks the potential to drag the greenback further below in trading sessions.
The Mexican peso had good momentum in late November to early December as traders look to close 2019 with gains against the US dollar. Although yesterday the pair briefly went up, it’s still believed that the peso will continue to drag the dollar to its support as it basks in the glory of the recently signed trade deal between the United States, Canada, and Mexico. The optimism surrounding the trilateral agreement boosted the appeal of Latin America’s most-traded currency in recent weeks, and it is still expected that it will continue to brighten its luster entering 2020. The revised pact was finally sealed after months of negotiation between the three countries. US officials said that the revisions to the USMCA agreement will heighten the labor and environmental policies, as well as salary increases and better power for the union labor of the countries, especially in Mexico.
- Trading Instrument