NAFTA talks conclude and termination risks fade, but little progress - ING

The sixth round of NAFTA talks conclude today and could inject some headline-driven noise into MXN and CAD, suggests Viraj Patel, Foreign Exchange Strategist at ING.

Key Quotes

“While reports suggest that talks have moved in a positive direction – with odds of a US termination of NAFTA fading (and Trump unlikely to use the State of Union as a platform to do this) – key issues still need to be resolved, such that negotiations may have to be extended beyond the 31 March deadline for completion. Given that the process risks colliding with pivotal elections in Mexico (July 1 Presidential vote) and the US (November midterms), there’s a growing chance that the NAFTA impasse could continue for the best part of 2018. For today, we expect talks to progress to the final round (late Feb).”