Canadian dollar holds near eight-day low as U.S. tariff uncertainty weighs
The loonie was trading 0.1% higher at 1.3675 per U.S. dollar, or 73.13 U.S. cents, after touching its weakest intraday level since June 30 at 1.3694.
"There's a little bit of steam (coming) out of the loonie, primarily driven by risk aversion as these tariffs have basically come back to the forefront," said Rahim Madhavji, president at KnightsbridgeFX.com.
U.S. President Donald Trump said he will announce a 50% tariff on imported copper on Tuesday, an effort to boost U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods. Canada is a major producer of copper and other commodities such as oil.
Canada has already been hit with hefty U.S. tariffs on autos, steel and aluminum but has escaped sweeping U.S. duties imposed in April. Canadian Prime Minister Mark Carney and Trump have agreed to reach some form of a trade deal by July 21.
The price of oil rose 0.8% to $68.45 a barrel as investors assessed the latest developments on U.S. tariffs and a higher than expected increase to OPEC+ output for August.
Canadian economic activity expanded in June at the fastest pace in four months and price increases accelerated, Ivey Purchasing Managers Index (PMI) data showed. The seasonally adjusted index rose to 53.3 last month from 48.9 in May, posting its highest level since February.
Canadian bond yields moved higher across a steeper curve, tracking moves in U.S. Treasuries. The 10-year was up 2.8 basis points at 3.430%, after earlier touching its highest level since January 16 at 3.452%.
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US bank M&A hopes revive under Trump regulators
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That leaves Morgan Stanley (MS.N), opens new tab and Goldman Sachs (GS.N), opens new tab as the largest lenders that could pursue the most traditional M&A deals, the three industry executives said. All the six large banks declined comment. The Federal Reserve's new Vice Chair for Supervision, Michelle Bowman, is expected to facilitate deals because of her support for lighter regulation, the three industry executives said. Regulators are generally going to be open to large institutions expanding, but the approval process will remain extensive, said Katie Cox, a consultant CoxFedLaw who previously served as an M&A expert at the Fed. Participants need to show they meet financial and compliance ratings and hold public consultations, Cox said. The process takes at least a year and could probably be sped up to nine months, she added. Regulators would also weigh how combining banks would affect financial stability, and "that's going to be the problem for the G-SIBs -- if the acquisition of any target is going to exacerbate their current financial stability position in the U.S. markets," she said. "And then there's the competition and antitrust rules." Bankers point to a 2023 example as a cautionary tale of the Biden era's skepticism toward deals. After more than a year of waiting for regulatory approvals, Toronto-Dominion Bank ( opens new tab called off its $13.4 billion takeover of First Horizon (FHN.N), opens new tab, triggering a near 40% fall in the latter bank's shares. Industry executives were still watching BNY, which also has GSIB status, to see whether it will continue to pursue Northern Trust or set its sights elsewhere. The approach is being seen as a test case for the administration's openness to GSIB deals, which could reshape the industry because they involve the biggest and most complex institutions, the three executives said.
