Spooked by the announcement of U.S. tariffs on Canadian lumber, currency traders are dumping the loonie, sending it down to its lowest point in 14 months.
The Canadian dollar shed more than a cent as news of the tariffs spread overnight. It was trading around 73.5 cents U.S. at 11 a.m. ET, its lowest level since February, 2016.
The Trump administration announced on Monday the first batch of duties on Canadian lumber, averaging 20 per cent. The U.S. International Trade Commission will have to rule on the tariff, something that may not happen until 2018. But in the meantime, U.S. customs will collect cash deposits from Canadian lumber exporters.
"It's likely that the reaction today is on fear that the lumber duties are the tip of the iceberg, showing that despite cozy talk between Trudeau and Trump, the U.S. is willing to flex its muscles to show a protectionist 'win,'" wrote CIBC economist Avery Shenfeld.
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