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USD/CAD: Canadian Dollar gains on optimism over USMCA trade deal

The bid tone around the Canadian dollar (CAD) has strengthened with reports stating that an agreement on the US-Mexico-Canada Agreement (USMCA) is close and there could be an official announcement of the same on Tuesday.

The USD/CAD pair is currently trading at 1.3230, representing marginal losses on the day, having hit a high of 1.3245 in early Asia.

Canadian Prime Minister Justin Trudeu’s office issued a statement at 1:03 GMT stating that Trudeau spoke with Trump about USMCA and the two are working out the final negotiations of the deal.

Meanwhile, the US House and Means Committee Chairman Neal and the House Speaker Nancy Pelosi said that an official announcement is likely to come through on Tuesday. White House adviser Jared kushner also echoed similar sentiments soon before press time.

The Canadian dollar has erased early losses on positive trade related news flow and may extend gains further during the day ahead. That said, the technical outlook for USD/CAD would turn bearish only below Thursday’s low of 1.3158.

The CAD took a beating on Friday after the US jobs data for November blew past expectations, forcing markets to price out the prospects of a Federal Reserve rate cut in 2020. Meanwhile, the Canadian economy unexpectedly shed 71k jobs, the biggest loss since the financial crisis.