Canadian greenback features 0.2% in opposition to the buck
Trades in a spread of 1.4407 to 1.4520
Two-year yield hits almost three-year low
TORONTO, March 4 – The Canadian greenback clawed again a few of its latest declines in opposition to its U.S. counterpart on Tuesday because the buck posted broad-based losses and traders doubted that hefty U.S. tariffs on Canadian items can be sustained.
The loonie was buying and selling 0.2% larger at 1.4450 per U.S. greenback, or 69.20 U.S. cents, after buying and selling in a spread of 1.4407 to 1.4520. On Monday, the foreign money posted its seventh straight day of declines and hit a one-month intraday low of 1.4541. U.S. President Donald Trump’s new 25% tariffs on imports from Mexico and Canada took impact, together with a doubling of duties on Chinese language items to twenty%, launching new commerce conflicts with the highest three U.S. buying and selling companions.
Canadian Prime Minister Justin Trudeau stated Ottawa would reply with 25% tariffs on C$30 billion ($20.7 billion) price of U.S. imports, and one other C$125 billion if Trump’s tariffs had been nonetheless in place in 21 days.
“The CAD has definitely priced in some tariff danger in latest weeks however not 25%, so worth motion is a bit stunning,” Shaun Osborne, chief foreign money strategist at Scotiabank, stated in a word. “Value motion suggests maybe that markets are skeptical that 25% tariffs will stay in place for too lengthy.” The U.S. greenback fell to a three-month low in opposition to a basket of main currencies on considerations about slowing development and the affect from tariffs on the U.S. financial system, whereas the value of oil, one in every of Canada’s main exports, was buying and selling 0.8% decrease at $67.80 a barrel following studies that OPEC will proceed with a deliberate output enhance in April.
Canadian bond yields had been blended throughout a steeper curve as traders priced in a roughly 80% probability that the Financial institution of Canada would lower rates of interest additional on March 12. The two-year was down 2 foundation factors at 2.457%, its lowest degree since April 2022. (Reporting by Fergal Smith; Enhancing by Paul Simao)
