By Fergal Smith<\/p>\n
TORONTO, May 27 (Reuters) – The Canadian dollar weakened to a six-week low against its U.S. counterpart on Wednesday, as oil prices \u200cdropped and investors focused on the review of a continental free trade \u200cpact that has shielded much of Canada’s goods from U.S. tariffs.<\/p>\n
The loonie was trading 0.2% lower at \u200b1.3830 per U.S. dollar, or 72.31 U.S. cents, after touching its weakest intraday level since April 13 at 1.3851.<\/p>\n
The Trump administration’s trade agency said it will kick off the first of three negotiating rounds with Mexico this week to revamp the United \u200cStates-Mexico-Canada Agreement, but made no \u2060mention of any talks with Canada.<\/p>\n
“There is this headline risk for the Canadian dollar around USMCA,” said Adam Button, chief currency analyst \u2060at investingLive.<\/p>\n
“It’s back in the headlines now and U.S. representatives seem to be taking a harder line on Canada than Mexico despite differences in the trade deficit.”<\/p>\n
The U.S. \u200bdeficit on \u200bgoods and services with Canada was $24.4 billion \u200bin 2025, much less than the $194.6 \u200cbillion deficit with Mexico, data from the U.S. Bureau of Economic Analysis showed.<\/p>\n
The price of oil, one of Canada’s major exports, was trading 4.5% lower at $89.63 a barrel after Iranian state TV said it had seen a draft of an initial, unofficial framework for an agreement between Iran and the United States on ending \u200ctheir conflict and reopening the Strait of Hormuz.<\/p>\n
“CAD \u200bis particularly sensitive to the outcomes in Iran \u200band the Bank of Canada has \u200bexplicitly said that,” Button said.<\/p>\n
If oil prices were to stay \u200chigh and begin pushing up inflation the \u200bBoC has said it \u200bmight have to respond with consecutive interest rate hikes.<\/p>\n
Investors are pricing in 34 basis points of tightening this year from the central bank, down \u200bfrom 54 basis points before \u200cthe release of cooler-than-expected domestic inflation data last week.<\/p>\n
Canadian bond yields were \u200bmixed across the curve, with the 10-year barely changed at 3.460%.<\/p>\n
(Reporting \u200bby Fergal Smith, Editing by Nick Zieminski)<\/p>\n","protected":false},"excerpt":{"rendered":"By Fergal Smith TORONTO, May 27 (Reuters) – The Canadian dollar weakened to a six-week low against its…\n","protected":false},"author":2,"featured_media":63589,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[27243,17,1635,388,1209,27242,3240],"class_list":["post-63588","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-adam-button","tag-canada","tag-canadian-dollar","tag-mexico","tag-oil-prices","tag-trade-deficit","tag-u-s-dollar"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/63588","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=63588"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/63588\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/63589"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=63588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=63588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=63588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}