(Updates to late trading, adds analyst comment)
* Canadian dollar at C$1.3522, or 73.94 U.S. cents
* Bond prices mixed across yield curve
By Alastair Sharp
TORONTO, June 1 The Canadian dollar weakened
against its U.S. counterpart on Thursday as oil prices fell in
afternoon trade and President Donald Trump said he will withdraw
the United States from a landmark global climate pact.
Trump's decision to withdraw from the 2015 Paris agreement
to reduce emissions was seen as a bad omen as Canada and Mexico
gird for likely tense negotiations with Washington to update the
North American Free Trade Agreement (NAFTA).
"Leaving the Paris accord increases the likelihood that he
will walk away from NAFTA," said Adam Button, currency analyst
at ForexLive in Montreal. "NAFTA is more vulnerable than it was
"It shows he will do whatever it takes to boost U.S. growth
and doesn't care what the rest of the world or the corporate
world thinks," Button added.
At 4:00 p.m. ET (2000 GMT), the Canadian dollar was
trading at C$1.3522 to the greenback, or 73.94 U.S. cents, down
That was at the weak end of the day's narrow range between
C$1.3472 to C$1.3527.
It weakened steadily through the afternoon, tracking a
similar slip in oil prices as concerns that key
producers were still adding to the global crude glut weighed on
the global Brent benchmark.
U.S. crude ended up slightly after a
larger-than-expected domestic inventory drawdown, a day after
hitting a nearly three-week low.
The U.S. dollar rose 0.3 percent against a basket of
major currencies, helped by a report that showed U.S. private
employers added 253,000 jobs in May.
The Canadian currency is expected to dip in the short term
but stabilize in 12 months, a Reuters poll showed, as a
strengthening domestic economy encourages the Bank of Canada to
prepare the market for interest rate hikes.
Canadian government bond prices were mixed across the yield
curve, with the two-year off half a Canadian cent to
yield 0.697 percent and the 10-year down 7 Canadian
cents to yield 1.424 percent.
Prices for 20- and 30-year issues were higher.
Canada's trade data for April is due on Friday.
(Additional reporting by Fergal Smith; Editing by Nick
Zieminski and James Dalgleish)