Canadian dollar outperforms G10 peers as trade war fears ease
TORONTO, April 22 (Reuters) - The commodity-linked Canadian dollar was the top-performing Group of 10 currencies on Tuesday as investors weighed prospects of trade tensions de-escalating between the United States and China.
Wall Street rallied and the U.S. dollar jumped against a basket of major currencies after a report that U.S. Treasury Secretary Scott Bessent had said a tariff standoff with China was unsustainable, and that he expects the situation to de-escalate.
"The Canadian dollar tends to outperform when trade tensions are declining and underperform when trade tensions are rising," said Adam Button, chief currency analyst at ForexLive.
"It says to me the global paradigm is really the one to think about."
The price of oil settled up nearly 2% at $64.31 a barrel, while the loonie was trading 0.2% higher at 1.3816 per U.S. dollar, or 72.38 U.S. cents.
It was the only G10 currency to gain ground against the greenback. On Monday, it touched a six-month intraday high at 1.3778.
Canada has largely avoided U.S. tariffs on goods that are compliant with a continental trade pact but its exports, including oil, face additional headwinds from an expected global economic downturn.
"Canada is likely to be collateral damage," Button said.
The IMF slashed its Canadian growth forecast to 1.4% in 2025 and 1.6% in 2026 from 2% projected for both years in January.
Canadian Prime Minister Mark Carney took his election campaign to Quebec, saying only he could protect the predominantly French-speaking province from U.S. President Donald Trump.
Canadian bond yields were mixed across a flatter curve, with the 10-year down 4.5 basis points at 3.199%.
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