While the macroeconomic implications of replacing NAFTA with USMCA are minor, the diminished risk of US auto tariffs is good news for the Canadian economy. The effective removal of that threat could see the loonie rise further in the coming weeks and may free up any investment projects that had been delayed. Nevertheless, the new trade agreement is unlikely to prevent economic growth from slowing in 2019 and 2020, and we still see the loonie depreciating next year.
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