Canadian Dollar Posts Gains vs. USD on Improving NAFTA Negotiations

The Canadian dollar gained approximately 0.65% on Monday on a more positive outlook on NAFTA negotiations, in addition to a rise in expectations that the Bank of Canada might raise rates again this year.

The loonie also got a boost today from Larry Kudlow, director of the White House National Economic Council, who told CNBC that "good progress is being made on North American Free Trade Association talks."

Additionally, Bank of Canada's first-quarter Business Outlook Survey - Spring 2018, which indicated that “business sentiment continues to be positive,” pushed the CAD to close the day off at a 1-month high of 1.2698 against the USD.

While the survey's tone was positive overall, BofA also pointed that some Canadian companies remained cautious with their sales forecasts due to uncertain trade policies in the U.S., "While firms’ expectations for US economic growth have strengthened further, some cited rising protectionism and reduced competitiveness as factors limiting the impact on their sales.," said Bank of Canada.

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