CANADA FX DEBT-Canadian dollar weakens on US auto tariff measures

By Fergal Smith

TORONTO, March 27 (Reuters) - The Canadian dollar fell against its U.S. counterpart on Thursday after President Donald Trump unveiled hefty tariffs on autos, one of Canada's major exports, but a history of U.S. trade duty reversals kept the currency's losses in check.

The loonie CAD= was trading 0.4% lower at 1.4315 per U.S. dollar, or 69.86 U.S. cents, after moving in a range of 1.4260 to 1.4328.

"Uncertainty stemming from repeated U.S. tariff flip-flopping has kept any downside contained for now," said Nick Rees, senior FX market analyst at Monex Europe Ltd.

Governments from Ottawa to Paris threatened retaliation after Trump unveiled a 25% tariff on imported vehicles, expanding a global trade war.

Ontario, Canada's most populous province and home to many auto manufacturers, expects the U.S. administration to significantly ease the impact of auto tariffs on Canada, following a phone call from U.S. Commerce Secretary Howard Lutnick to Premier Doug Ford, the Globe and Mail reported.

"Barring another reprieve, we expect to see USD-CAD make further gains in the coming days given the negative impact that higher tariff barriers will inevitably have on the Canadian economy," Rees said.

Trump has suspended until April 2 the tariffs he had imposed earlier this month on most goods from Canada and Mexico and has also proposed a more sweeping agenda of reciprocal tariffs, under which the U.S. would match all levies on U.S. goods imposed by other countries.

The price of oil CLc1, another of Canada's major exports, was barely changed at $69.67 a barrel, while Canadian government bond yields moved lower across a steeper curve.

The 10-year yield CA10YT=RR was down 2.4 basis points at 3.109%, while it moved 2.6 basis points further above the 2-year yield to about 54 basis points, the largest gap since January 2022.