Loonie Weakens Amid Renewed Trade Tensions and Sticky US Inflation

The Canadian dollar has weakened against the U.S. dollar due to renewed trade tensions between the two countries and higher-than-expected U.S. inflation data.

On Wednesday, the loonie reached an intraday high of C$1.3893 and a low of C$1.3836 before settling at around C$1.3876, up 0.27% from Tuesday's close.

The Canadian currency came under pressure after U.S. inflation data showed price pressures remained elevated in July, with headline personal consumption expenditures inflation holding steady at 3.7% annually and core PCE remaining at 3.3%.

This has strengthened the case for a Federal Reserve rate hike and supported the U.S. dollar, which rose modestly against major currencies on Wednesday as investors positioned ahead of the inflation data release.