CANADA FX DEBT-Canadian dollar hits a 12-day low amid broader gains for the greenback
By Fergal Smith
TORONTO, July 9 (Reuters) - The Canadian dollar weakened to a 12-day low against its U.S. counterpart on Wednesday as the greenback notched up broad-based gains after investors shrugged off the latest U.S. tariff threats.
The loonie CAD= was trading 0.3% lower at 1.3695 per U.S. dollar, or 73.02 U.S. cents, after touching its weakest intraday level since June 27 at 1.3710.
U.S. President Donald Trump said on Tuesday he would impose a 50% tariff on imported copper and soon introduce long-threatened levies on semiconductors and pharmaceuticals.
"For now, at least, traders seem content to discount White House rhetoric, instead focusing on a reprieve that sees reciprocal tariffs come into force on August 1, rather than July 9 as had previously been expected," said Nick Rees, senior FX market analyst at Monex Europe Ltd.
"This plays firmly into the market bias that assumes Trump will continue to chicken out, helping to support greenback upside when set against an otherwise quiet data calendar."
Some investors have referred to the acronym "TACO", or Trump Always Chickens Out, as a rationale for why markets should not fear the announcement of harsh tariffs because many believe they will likely be moderated.
Wall Street rose and the U.S. dollar .DXY extended this week's bounce against a basket of major currencies. The greenback has lost ground this year as investors reassessed earlier expectations that the United States could be spared in the event of a global economic slowdown.
Canada's employment report for June, due on Friday, could help guide expectations for a resumption of Bank of Canada interest rate cuts. Economists expect a flat reading for employment and the unemployment rate to edge up to 7.1% from 7% in May.
Canadian bond yields moved lower across the curve, tracking moves in U.S. Treasuries. The 10-year CA10YT=RR was down 4 basis points at 3.399%, after earlier touching its highest level since January 16 at 3.462%.
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