Investing.com – The dollar rose against a basket of major currencies shrugging off a steep rise in the Canadian dollar following reports that the Trump administration is set to announce an updated North American Free Trade Agreement (NAFTA) deal next week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.17% to 89.84.
US President Donald Trump is expected to announce a new NAFTA deal at the Summit of the Americas in Peru next week after meeting with representatives from Mexico and Canada, Bloomberg reported, citing sources.
Reports of progress on NAFTA easing months of investor uncertainty following several rounds of negotiation among the U.S., Canada and Mexico representatives.
USD/CAD fell 0.94% to C$1.2791, while USD/MXN fell 0.24% to 18.200. The rise in the peso was somewhat subdued as Trump recently warned that Mexico “must stop the big drug and people flows” into the U.S., or he would “stop their cash cow, NAFTA.”
The rise in the greenback comes amid somewhat dovish comments from Minneapolis Federal Reserve President Neel Kashkari, who said it's not clear how tight the labor market is and conceded that he was surprised at the extent that the tax cuts had lifted confidence. Kashkari warned, however, that he's not sure if the legislation will boost investment or long term growth.
The yen – a popular safe-haven destination for investors- gave back some of its recent gains as sentiment on riskier assets improved, with the USD/JPY up 0.51% to Y106.44.
EUR/USD fell 0.31% to $1.2264, while GBP/USD rose 0.10% to $1.4059 as the latter pair was supported by upbeat manufacturing PMI data.