Trade War Weighs Down Canadian Dollar Amid Escalating Tensions

The Canadian dollar weakened against its US counterpart on Wednesday as the trade war between the two countries intensified.

On Tuesday, the US banned a broad swath of Canadian alcoholic beverages, motorcycles, and dairy products from import in retaliation for Canada's own tariffs on US goods.

Firm oil prices were not enough to offset the negative impact of the escalating trade tensions, with Brent crude futures breaching $100 a barrel for the first time since July 24 due to attacks in the Middle East.

The loonie was trading 0.2% lower at 1.3805 per US dollar, or 72.44 US cents, after giving back much of its previous day's gains.