Canadian dollar gains as currency avoids Trump's ire

Thu Feb 2, 2017 5:37pm EST
 
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By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar made gains against its U.S. counterpart on Thursday as investors cheered the loonie's absence from a list of currencies attracting the ire of U.S. President Donald Trump.

The U.S. dollar .DXY hit its lowest level since mid-November against a basket of currencies before recovering, after the U.S. Federal Reserve disappointed investors hoping for a clear sign of a March interest rate rise and signs the new U.S. administration favors a weaker greenback weighed.

Trump and his top trade adviser this week criticized Germany, Japan and China, saying the three key U.S. trading partners were engaged in devaluing their currencies to the harm of U.S. companies and consumers.

"The odd one out is the Canadian dollar," said Adam Button, currency analyst at ForexLive in Montreal. "Every day that goes by where Trump doesn't criticize Canadian trade policy is a win for the Canadian dollar."

Canadian officials are convinced Mexico will suffer the most damage from any changes to the North American Free Trade Agreement, which Trump wants to rework and under which Canada sends 75 percent of its exports to the United States.

Gains for the loonie also came after domestic data this week showed that the economy expanded faster than expected in November, and that the manufacturing sector grew at its fastest pace in over two years in January.

The Canadian dollar CAD=D4 settled at C$1.3020 to the greenback, or 76.80 U.S. cents, stronger than Wednesday's close of C$1.3047, or 76.65 U.S. cents.

The currency traded in a range of C$1.2981 to C$1.3050.   Continued...

 
A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch