THE Canadian dollar weakened against its US counterpart on Friday (Jan 17), with the currency approaching a multi-year low it hit in December as the looming US presidential inauguration focused attention on expected trade tariffs.
The loonie was trading 0.5 per cent lower at 1.4460 per US dollar, or 69.16 US cents, after trading in a range of 1.4383 to 1.4464. Last month, it touched its weakest level in nearly five years at 1.4467.
“The Canadian dollar is trading close to its recent low against the US dollar into the end of the week,” Shaun Osborne, chief currency strategist at Scotiabank, said in a note. “The soft performance indicates that investors remain deeply concerned about what the next week – and those that follow – will bring.”
Canada is ready to respond to tariffs from its top trade partner the United States on Monday if president-elect Donald Trump, who takes office that day, follows through on his threat to impose them, Foreign Minister Melanie Joly said.
Investors were also awaiting the Bank of Canada’s fourth-quarter Business Outlook Survey on Monday, which could offer clues on the prospects of an additional interest rate cut by the central bank later this month.
The BOC will communicate more clearly and improve its forecasting models to help predict future shocks, it said, after publishing a review of the steps taken to tackle the pandemic.
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The US dollar strengthened against a basket of major currencies, adding to the gains it made in recent weeks as US Treasury yields climbed.
The price of oil, one of Canada’s major exports, settled 1.7 per cent lower at US$78.68 a barrel.
Canadian bond yields fell across a flatter curve.
The 10-year was down 4.1 basis points at 3.30 per cent, after earlier touching its lowest level since Jan 7 at 3.29 per cent. REUTERS
