Article Highlights

  • Canadian dollar at C$1.2899, or 77.53 U.S. cents
  • The loonie hits a six-day low at C$1.2906
  • Bond prices lower across a steeper yield curve
  • 10-year yield touches a four-year high at 2.480 percent
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The Canadian dollar hit a nearly one-week low against its U.S. counterpart on Tuesday as the greenback broadly rose and investors weighed prospects of a deadline being met for a new NAFTA trade pact between Canada, the United States and Mexico.

The U.S. dollar rose against a basket of major currencies as data showed a rise in U.S. retail sales and the U.S. 10-year Treasury note yield climbed further above the 3 percent threshold to its highest since July 2011.

Mexico’s economy minister, Ildefonso Guajardo, said he does not expect to meet a deadline set for Thursday to reach a new North American Free Trade Agreement that could be presented to the current U.S. Congress.

Canada sends about 75 percent of its exports to the United States, so its economy could benefit if a NAFTA deal is reached.

At 9:15 a.m. EDT (1315 GMT), the Canadian dollar was trading 0.7 percent lower at C$1.2899 to the greenback, or 77.53 U.S. cents. The loonie hit its weakest level since Wednesday at C$1.2906.

Losses for the loonie came despite the price of oil, one of Canada’s major exports, rising to a 3-1/2-year high.

U.S. crude prices were up 0.75 percent at $71.49 a barrel, supported by tight supply and planned U.S. sanctions against Iran that are likely to restrict crude oil exports from one of the biggest producers in the Middle East.

Resales of Canadian homes fell 2.9 percent in April from March to the lowest level in more than five years, the Canadian Real Estate Association said.

Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year fell 4 Canadian cents to yield 2.017 percent and the 10-year declined 41 Canadian cents to yield 2.473 percent.

The 10-year yield touched its highest intraday since April 2014 at 2.480 percent.