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It's Inauguration Day Friday for one of the biggest influencers in Canadian personal finance, U.S. president-elect Donald Trump.

In 2017, your financial well-being will be driven to an unprecedented extent by factors outside Canada. Mr. Trump is the most notable, but also keep your eyes on Europe. Troubled banks, struggling economies and political instability could upset financial markets globally.

Mr. Trump's effect on your finances was addressed by the Bank of Canada earlier this week after an announcement that interest rates would remain steady for the time being. The bank said Canada's economy would take a "material" hit from protectionist economic policies under Mr. Trump's leadership.

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Protectionism means using tariffs, which are basically taxes, to raise the cost of imported goods. The point is to protect domestic industries so they can provide jobs and pay taxes. Canadian exports are overwhelmingly tilted to the United States, so U.S. protectionism matters a lot to Canada's economic performance.

Bank of Canada Governor Stephen Poloz said an interest rate cut remains a possibility as a result of the economic uncertainty ahead. Ironically, Mr. Trump has already had an effect on Canadians by helping to drive the interest rates that guide mortgage costs higher. Confused? Hang on tight because 2017 could be a year full of apparent contradictions like this.

The interest rate that the Bank of Canada controls is connected to the cost of variable-rate mortgages, lines of credit and floating rate loans. These are the types of borrowing that could become cheaper if the central bank sees exports suffering under a U.S. policy that makes products from other countries more expensive through import tariffs.

Mortgage rates have already been influenced by speculation over what Mr. Trump's economic policies will be as president. He's talked about stimulating the U.S. economy in a way that is expected to encourage growth and likely generate inflation. This has driven up interest rates in the bond market both in the United States and, in turn, Canada.

The rate on the five-year Government of Canada bond went from 0.71 per cent on the day before the U.S. election to 1.10 per cent at mid-week. As noted in a column last week, the interest rate on discounted five-year mortgages for people with down payments of less than 20 per cent has risen 0.37 of a percentage point in the past couple of months. New mortgage regulations are partly responsible for this rise, but rising bond yields are the bigger influence.

As a result of Mr. Trump's policies, we could see lower costs for floating-rate borrowing products like variable-rate mortgages and credit lines, and higher costs for fixed-rate mortgages. No one's really sure how things will go, though. So don't play a hunch in picking a mortgage. Make a choice that makes you most comfortable emotionally and forgive yourself in advance if it turns out you didn't pick the right choice.

Choose a fixed-rate mortgage for the comfort of a long stretch of not having to worry about what changes in interest rates will mean to your payments. Go variable if you're a pessimist about the economy and willing to gamble on getting a mortgage a bit cheaper than it is today. I'd take the first option in a heartbeat if I needed a mortgage.

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Let's remember that domestic factors also have a big influence on rates. Two weeks ago, economists were almost giddy about the number of jobs created in December. The implication was that the economy was on an upswing that would put pressure on the Bank of Canada to raise rates. The bank's comments about a rate cut this week undermine the case for rising borrowing costs, but outlooks change week by week these days.

Regardless of whether the news is coming from Washington or Europe, expect dramatic, market-moving financial headlines in 2017. Please ignore them in managing your finances. Measure your success by how much debt you reduce or how much you increase your savings, not by whether you profited from events in the news.

In your investing, now is a time for calm, rational thinking based on long-term goals and prudent diversification. Turning headlines into investing strategies is for suckers.

Som Seif, CEO of Purpose Investments, discusses how incoming U.S. president Donald Trump will affect investors in this country Globe and Mail Update

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