Canadian dollar pulls back from one-week high as Yellen boosts greenback

Tue Feb 14, 2017 5:28pm EST
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar posted a fresh one-week high against its U.S. counterpart on Tuesday as oil rose but gains were mostly reversed as testimony by Federal Reserve Chair Janet Yellen boosted the greenback.

Gains for the loonie came one day after U.S. President Donald Trump said he only wants to tweak trade ties with Canada.

"A very disruptive trade agenda could have prompted the Bank of Canada to cut rates," Jean said.

Still, Trump's pledge to renegotiate the North American Free Trade Agreement (NAFTA) to focus on Mexico is almost impossible and Canada will not emerge unscathed, Canadian officials and trade experts said.

Canada sends 75 percent of its exports to the United States.

A proposed U.S. border adjustment tax would reduce Canada's real gross domestic product by almost 1 percent, the C.D. Howe Institute said in a research report.

U.S. crude CLc1 prices settled 27 cents higher at $53.20 a barrel, but some gains were pared amid concerns about rising supply from U.S. shale output. [O/R]

Oil is one of Canada's major exports.   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