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U.S. likely to give 6 months’ notice to withdraw from NAFTA: reports

CityNews | posted Thursday, Jan 11th, 2018

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Canadian government officials say there’s an increasing likelihood that the U.S. will give six months’ notice to withdraw from the North American Free Trade Agreement, according to separate reports from Reuters and Bloomberg.

The Canadian dollar and the Toronto stock index fell on the news.

The Loonie closed at an average trading price of 80.03 cents US, down 0.27 of a U.S. cent.

The S&P/TSX composite index lost 71.29 points to 16,247.95, with industrials among the main decliners.

The rate on Canada’s two-year government bonds declined seven basis points to 1.73 per cent, dropping from a six-year high reached Tuesday.

CIBC chief economist Avery Shenfeld says a Bank of Canada interest rate hike next week is not a given.

“The existing Bank of Canada forecast had assumed no change in trade relationships, so this is a negative for their outlook,” said Shenfeld.

Talks to overhaul NAFTA between the U.S., Canada and Mexico began in August but have so far yielded few results. A sixth round of negotiations will begin this month in Montreal.

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