TORONTO: The Canadian dollar weakened to near 12-week low against its US counterpart on Friday, pressured by the Bank of Canada’s most recent interest rate cut and an uncertain outlook for the economy ahead of the Nov. 5 US presidential election.

The loonie was trading 0.2% lower at 1.3880 to the US dollar, or 72.05 US cents, after touching its weakest intraday level since Aug. 5 at 1.3893.

For the week, the currency was down 0.6%, its fourth straight weekly decline, marking the longest such streak since January.

On Wednesday, the BoC reduced its benchmark rate by half a percentage point to 3.75% to support the economy, the first cut of that size in 15 years outside of the pandemic era.

“We’re weaker on the week not surprisingly given the Bank of Canada’s 50-basis-point rate cut,” said Benjamin Reitzes, Canadian rates & macro strategist at BMO Capital Markets.

Canada’s new immigration reduction targets announced this week will likely have a bigger impact on the BoC’s growth forecast than on the inflation trajectory, Governor Tiff Macklem said.

“Part of what’s gone on is you have a US election coming up and there are risks to Canada and the Canadian dollar as part of the US election. Until those risks are cleared there is a meaningful headwind for Canada,” said Reitzes.

Republican US presidential candidate Donald Trump has proposed sweeping tariffs on imported goods. Canada sends about 75% of its exports to the United States.

Domestic data showed that retail sales rose by 0.4% in August from July, slightly less than expected, while a preliminary estimate showed sales up 0.4% in September.

Canadian government bond yields moved higher across the curve, tracking moves in US Treasuries. The 10-year was up nearly 2 basis points at 3.260%.