Canadian Dollar Hits 6-Week Low on USMCA Uncertainty
Canadian Dollar Weakens on USMCA Uncertainty
The Canadian dollar fell to a six-week low against its U.S. counterpart as oil prices dropped and investors focused on the review of the USMCA trade pact. The loonie traded 0.2% lower at 1.3830 per U.S. dollar, touching its weakest since April 13 at 1.3851.
Oil Prices and Trade Deficit
Oil prices, one of Canada's major exports, fell 4.5% to $89.63 a barrel. The U.S. trade deficit with Canada was $24.4 billion in 2025, much smaller than the $194.6 billion deficit with Mexico, adding to concerns over Canada's position in USMCA renegotiations.
Market Expectations and Central Bank
Investors now price in 34 basis points of tightening from the Bank of Canada this year, down from 54 basis points before cooler-than-expected inflation data. The 10-year bond yield was steady at 3.460%.
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