The Canadian dollar was trading lower Monday morning after U.S. President Donald Trump continued his attacks on Canada and Prime Minister Justin Trudeau.
Trump complained on Sunday that he had been blindsided by Trudeau’s criticism of his tariff threats at a summit-ending news conference.
In tweets, Trump insulted Trudeau as “dishonest” and “weak.”
PM Justin Trudeau of Canada acted so meek and mild during our <a href=”https://twitter.com/g7?ref_src=twsrc%5Etfw”>@G7</a> meetings only to give a news conference after I left saying that, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!
Other Trump advisers also attacked Trudeau in TV appearances on Sunday.
Trump trade adviser Peter Navarro said in an interview with Fox News that “there’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door.”
The loonie recovered some ground to trade at 76.98 cents US on Monday afternoon, but was still down from its average value of 77.15 cents US on Friday.
Loonie down across board
Market strategists pointed to the fact that the Canadian dollar was underperforming against all major currencies.
Bipan Rai, North American head of foreign exchange strategy at CIBC Capital Markets, said that while markets expected a “frosty outcome” to the G7 summit, the events were “way darker than anticipated.”
“Trump’s constant about-face, brinkmanship approach to negotiations implies heavy two-way risk for foreign exchange and that the trade premium is likely here to stay for Canadian assets,” he said in a note on Monday.
“The Canadian dollar has gapped weaker on a few crosses to start. Reaction in U.S. dollar-Canadian dollar cross is still muted, but euro-Canadian dollar and Canadian dollar-Swiss franc movements both portend to the loonie trading weaker on trade-weighted indices,” he added.
However, Shaun Osborne, chief foreign exchange strategist at Scotiabank, said even though the loonie dipped below 77 cents US on Monday morning, it has not moved below the lows of last week or back in March when it was trading closer to 76 cents US.
“The Canadian dollar certainly is soft, but it’s still within the recent ranges we’ve seen against the U.S. dollar,” he told CBC.
“It’s difficult for markets to really get their head around what this [Trump’s tweets] means. If it just is a negotiation ploy or if it is something that the U.S. firmly believes in.”