Investing.com - The Canadian dollar slumped to its lowest level in fourteen months against its U.S. counterpart on Tuesday, amid concerns over an escalating dispute with the U.S. over the terms of the North American Free Trade Agreement.
USD/CAD touched a session high of 1.3614, the strongest level since February 25 2016, and was at 1.3694 by 09.26 ET, up 0.7% from Monday’s close.
The loonie extended losses after U.S. President Donald Trump said on Twitter on Tuesday that Canada has made business for dairy farmers in Wisconsin and other border states very difficult, adding that the U.S. would not stand for this.
U.S. dairy producers want Trump hold Canada accountable for trade practices that have disrupted some U.S. dairy exports and prioritize dairy market access in NAFTA renegotiation talks.
The Canadian dollar had already come under heavy selling pressure after the U.S. Commerce Department said Monday it will impose import duties ranging from 3% to 24% on Canadian softwood lumber imports.
U.S. Commerce Secretary Wilbur Ross said his department “determined a need” because of unfair Canadian subsidies to the lumber industry to impose “countervailing duties of roughly one billion dollars.
Canada “will vigorously defend the interests of the Canadian softwood lumber industry, including through litigation,” said Jim Carr, natural resources minister and Chrystia Freeland, foreign affairs minister, adding they nonetheless “remain confident that a negotiated settlement is not only possible but in the best interests of both countries.”