President Trump Meets with the Prime Minister of Canada. Image source: Official White House Photo by Shealah Craighead
In a statement to the media from earlier today, President Donald Trump announced that the US and Canada have mutually agreed to close the border between the two countries for all non-essential traffic.
The decision is the latest effort by the two governments to curtail the spread of the novel coronavirus in North America by limiting the exposure of affected people. It comes just days after Donald Trump announced his decision to restrict travel from Europe for a period of 30 days.
The decision to close the border is more of a political and symbolic move to demonstrate to the public that the two governments are proactively pursuing solutions to the problem.
In practice, however, the disease is already spreading across the two sides of Niagara Falls and has been doing so since before the restrictions. Hence, the countermeasure is going to do little to stop the outbreak, but it could at least slow it down, which is the main goal at present.
Meanwhile, the Trump administration proposed a plan to support struggling American families by providing checks (depending on income) totalling $500 billion. This would be the most recent round of government stimulus that is proposed to negate the impact of the economic fallout.
In Canada, Prime Minister Justin Trudeau unveiled plans for a stimulus package totalling CAD 82 billion ($56 billion), which according to Bloomberg is equalling 3 per cent of Canada’s GDP, to accommodate the reeling business nationally.
In light of all of these developments, the dollar continues to strengthen as investors globally flee to liquid and easily convertible assets. Some market experts have even expressed concerns that the heightened demand for the greenback is going to hurt emerging markets.
Meanwhile, the USDCAD extended its gains today, following the announcement for the border closure. The pair is currently nearing the major resistance level at 1.47019, which has been prevalent since January 2016.
The pair is likely to continue its ascent in the following days as the global efforts to boost the aggregate liquidity are going to start coming into fruition.
USDCAD 1M Price Chart. Image source: Trendsharks ©, created with TradingView.com
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