Canadian dollar hits near 2-week low as tariff worries grow
Source: Live Mint
Canadian dollar falls 0.3% against greenback
Touches weakest since February 12 at 1.4316
Price of U.S. oil falls 2.8%
Bond yields ease across the curve
TORONTO, Feb 25 (Reuters) – The Canadian dollar weakened to a near two-week low against its U.S. counterpart on Tuesday as oil prices fell and investors grew more worried that U.S. trade tariffs will be implemented.
The loonie was trading 0.3% lower at 1.43 to the U.S. dollar, or 69.93 U.S. cents, after touching its weakest intraday level since February 12 at 1.4316.
“While U.S. growth fears are top of mind for markets, and are weighing on the U.S. dollar more broadly, CAD has managed to deliver an even weaker performance in recent days,” said Nick Rees, senior FX market analyst at Monex Europe Ltd.
“To us, this means that the loonie is finally headed in the right direction, with markets now starting to properly price in tariff risks facing the Canadian economy.”
On Monday, U.S. President Donald Trump said that tariffs on Canadian and Mexican imports are “on time and on schedule” despite efforts by the countries to beef up border security and halt the flow of fentanyl into the U.S. ahead of a March 4 deadline.
“If implemented these tariffs will tip the Canadian economy into a recession … With this in mind, we see plenty of scope left for the loonie to fall further as the week progresses,” Rees said.
Canada sends about 75% of its exports to the U.S., including oil, which fell to a two-month low. U.S. crude oil futures were trading 2.8% lower at $68.75 a barrel.
Canadian bond yields eased across the curve, tracking moves in U.S. Treasuries as investors sought a refuge in bonds from signs of deceleration in the U.S. economy and persistent geopolitical uncertainty.
The 10-year was down 6.8 basis points at 3.005% after earlier touching its lowest since February 7 at 2.979%. (Reporting by Fergal Smith; editing by Mark Heinrich)
