The Canadian dollar weakened to a five-month low against the greenback and lost ground against all the other G10 currencies on Friday, as potential US tariffs on Mexico threatened to lessen the effectiveness of a new North American trade deal. Canadian Foreign Minister Chrystia Freeland said that US President Donald Trump's threat to impose tariffs on Mexican imports in a migration dispute does not involve Canada, which will press ahead to ratify the new United States-Mexico-Canada Agreement (USMCA) trade deal in tandem with its allies.
But market players worried that the deal, which is intended to modernize free trade arrangements between the three countries, could be devalued. At 4:07PM EST (2007 GMT), the Canadian dollar was trading 0.1% lower at 1.3515 to the greenback, or 73.99 US cents. It was the only G10 currency to lose ground against the greenback.
The loonie, which touched its weakest intraday level since Jan. 3 at 1.3565, was down 0.9% in May, its fourth straight monthly decline. Canadian government bond prices were higher across the yield curve in sympathy with US Treasuries. The two-year rose 18 Canadian cents to yield 1.427% and the 10-year climbed 63 Canadian cents to yield 1.486%. The 10-year yield touched its lowest intraday since June 2017 at 1.478%.
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