Investing.com — The Canadian dollar edged lower against the U.S. dollar on Friday, with the loonie facing pressure from renewed trade tensions with Washington and a firmer greenback ahead of a closely watched speech by Federal Reserve Chair Kevin Warsh.
USD/CAD was around C$1.3853, down about 0.01% on the day, leaving the Canadian dollar at roughly 72.19 U.S. cents. The pair was little changed from Thursday’s close after the loonie gained 0.2% in the previous session.
The currency remains vulnerable after Canada-U.S. trade talks broke down last week, reviving concerns about the outlook for Canadian exports and economic growth. The loonie has nevertheless held relatively steady against the U.S. dollar compared with its performance against the Australian dollar, where the aussie recently climbed to a more than five-year high of C$0.9979.
Investors were also focused on Warsh’s speech at the Jackson Hole economic symposium, with markets looking for clues on the Federal Reserve’s interest-rate path. The dollar was holding near a one-week high on Friday as persistent inflation kept the possibility of a U.S. rate hike in play.
For Canada, the Bank of Canada is expected to keep its overnight rate at 2.25% at its Sept. 2 meeting and hold it there through at least the third quarter of 2027, according to a Reuters poll of 35 economists. The outlook reflects uncertainty created by the suspension of trade negotiations with the United States and concerns about the effect of weaker trade on growth.
The loonie received some support earlier this week from stronger oil prices and data showing Canada’s current account swung to its first surplus in four years. That helped the currency recover from a one-week low reached on Wednesday, when it traded as weak as C$1.3892 per U.S. dollar.
Attention now turns to Canada’s second-quarter GDP data and developments in U.S.-Canada trade, while Warsh’s comments could drive broader moves in the U.S. dollar and Canadian currency later in the session.
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