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PrintCANADA FX DEBT-Canadian dollar edges lower as U.S. tariff threat grows
BY Reuters | TREASURY | 01/08/25 02:20 PM EST*
Canadian dollar dips 0.2% against the greenback
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Trades in a range of 1.4340 to 1.4409
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Price of U.S. oil decreases 1.4%
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10-year yield touches a 6-week high at 3.384%
By Fergal Smith
TORONTO, Jan 8 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday as U.S. Treasury yields climbed and investors grew more worried about the threat of American trade tariffs.
The loonie was trading 0.2% lower at 1.4390 to the U.S. dollar, or 69.49 U.S. cents, after trading in a range of 1.4340 to 1.4409.
It touched a near 5-year low in December at 1.4467, pressured by a hawkish shift by the Federal Reserve and U.S. President-elect Donald Trump's threat of a 25% tariff on imports from Canada.
"Looking at the broader rebound in the USD, tariffs look like the culprit here again as Trump mulls over emergency legislation with regard to implementing tariffs," said George Davis, chief technical strategist at RBC Capital Markets. "This has boosted the USD across the board."
The U.S. dollar rose for a second straight session against a basket of major currencies as U.S. bond yields continued their recent advance, following a report that Trump was contemplating the use of emergency measures to allow for a new tariff program.
The price of oil, one of Canada's major exports, gave back some of its recent gains after large builds in U.S. fuel inventories last week. U.S. crude oil futures were trading 1.4% lower at $73.23 a barrel.
Investors were awaiting U.S. and Canadian employment data on Friday for clues on prospects of additional interest rate cuts by the Fed and the Bank of Canada.
Economists forecast that Canada's economy added 25,000 jobs in December and the unemployment rate edged up to 6.9% from 6.8% in November.
Canadian bond yields moved higher across a steeper curve, tracking moves in U.S. Treasuries.
The 10-year was up 4.1 basis points at 3.343%, after earlier touching its highest level since Nov. 25 at 3.384%. (Reporting by Fergal Smith; Editing by Alistair Bell)
