The loonie soared higher in the wake of news that Canada has reached a deal to join the United States and Mexico in a new North American trade agreement.
The loonie traded higher at 78.13 cents U.S. compared with an average of 77.25 cents U.S. on Friday.
READ MORE: NAFTA deal reached — Canada, U.S., Mexico reach trade agreement under new name
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While most economists have been expecting the Bank of Canada to raise its key interest rate target later this month, the trade negotiations have been a key uncertainty.
The central bank had made a point of saying it was closely watching the NAFTA talks and other trade policy developments, which could hurt the economy.
The newly christened the U.S.-Mexico-Canada Trade Agreement, or USMCA, provides increased access to Canada’s dairy market for U.S. producers.
READ MORE: Here are key details of the new North America free trade deal
It also appears to preserve the key dispute-resolution provisions, while a side letter published along with the main text of the agreement exempts a percentage of eligible auto exports from the tariffs.
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