The Canadian dollar CADUSD hit a three-week low against the greenback on Thursday as U.S. President Donald Trump said that tariffs on Canadian goods will go into effect on March 4, clearing up some confusion on the timing and dashing hopes of a reprieve.
The loonie was trading 0.8% lower at 1.4425 per U.S. dollar, or 69.32 U.S. cents, after touching its weakest intraday level since February 4 at 1.4442. It was the fifth straight day of declines for the currency.
Trump said that his proposed 25% tariffs on Mexican and Canadian goods will go into effect next week as scheduled because drugs are still pouring into the U.S. from those countries.
On Wednesday, Trump’s comments on the matter seemed to suggest that he may push the deadline back for about one month until April 4.
“If you were positioned for relief, this is a slap in the face,” said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull. “It’s an angry, get me out of the market, kind of move.”
The loonie touched a 22-year low of 1.4793 on February 3 in anticipation of tariffs which were then delayed.
The price of oil, one of Canada’s major exports, was up 2.2% at $70.11 a barrel as supply concerns resurfaced after Trump revoked a license granted to U.S. oil major Chevron to operate in Venezuela.
Canadian fourth-quarter gross domestic product data, due on Friday, could help guide expectations for further interest rate cuts by the Bank of Canada. Economists forecast annualized growth of 1.8%.
Canadian bond yields were mixed across a steeper curve, with the 2-year down 1.4 basis points at 2.636%.