TORONTO, April 27 (Reuters) – The Canadian dollar hit a 14-month low on Thursday before recovering to edge higher against the U.S. dollar after U.S. President Donald Trump told Canada and Mexico that renegotiating the North American Free Trade Agreement was “very possible.”
At 9:42 a.m. ET, the Canadian dollar was trading at C$1.3607 to the greenback, or 73.49 U.S. cents, up from the Bank of Canada’s official Wednesday close of C$1.3612, or 73.46 U.S. cents. Earlier in the session it touched C$1.3648, its weakest since Feb. 25, 2016.
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The currency had fallen on Wednesday after a U.S. official said the White House was considering a draft executive order to withdraw from NAFTA, which binds the United States, Canada and Mexico.
On Thursday, Trump wrote on Twitter that he had spoken with the leaders of Canada and Mexico who asked to renegotiate the trade pact.
He added: “Relationships are good – deal very possible!”
The loonie’s slight gain was tempered by a sharp fall in prices for oil, a major Canadian export.
U.S. crude prices were last down 2.1 percent at US$48.58 a barrel, while Brent lost 2.2 percent to $50.69 after news that two key Libyan oilfields had restarted, pumping crude into an already bloated market.
Canadian government bond prices were lower across the maturity curve, with the two-year price down 2.5 Canadian cents to yield 0.747 percent and the benchmark 10-year falling 17.2 Canadian cents to yield 1.595 percent.
