Trumps again with threats to NAFTA partners

President Donald Trump renewed his threat to scrap NAFTA and ripped on trading partners Canada and Mexico in a tweet early on Sunday, days before the three countries were scheduled to hold a second round of negotiations on rewriting the 23-year-old agreement

In a separate Sunday morning tweet, Trump repeated his pledge that Mexico will eventually pay for his proposed border wall, saying the barrier is needed due to Mexico's high crime rate. In response, Mexico's foreign ministry issued a statement Sunday afternoon reiterating the country's position that it will not "in any way or under any circumstance" pay for Trump's signature border wall.

The first five-day round of talks between the three countries concluded last Sunday, with all sides committing to follow an accelerated process in revamping the agreement, which was originally signed by former President Bill Clinton, a Democrat whose wife, former Secretary of State Hillary Clinton, ran against Trump in the 2016 election.

All of this, along with Hurricane Harvey, has negatively affected the dollar, as during the Asian session the greenback saw a sharp downturn, then stabilized. On the other hand, the Mexican peso continues to decline, with USD/MXN currently trading at 17.70. The Canadian retains its value without any major changes.

There are four more meetings between the parties to decide the fate of the deal, with traders and investors looking closely at the situation. Expectations are for increased volatility and negative moods in the Mexican peso, as the loser is expected to be Mexico.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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