TORONTO: The Canadian dollar weakened sharply to an eight-month low against its US counterpart on Wednesday as uncertainty over Republican Donald Trump's election to the White House threatened Canada's trade-intensive economy.
Trump has said he would renegotiate or scrap the North American Free Trade Agreement if elected.
"The uncertainty and the threat to tear up NAFTA are on net a mild negative for the currency (Canadian dollar) but there are certainly some small potential positives out there, especially if the U.S now embarks a stimulative fiscal policy," said Doug Porter, chief economist at BMO Capital Markets.
Global stocks fell, worried that a Trump victory could cause economic and global uncertainty, but oil reversed most of its early losses as the market recovered from an initial Brexit-like reaction to Trump's surprise victory.
US crude prices were down 0.51 percent at $44.75 a barrel.
At 9:14 a.m. EDT (1414 GMT), the Canadian dollar was trading at C$1.3443 to the greenback, or 74.39 US cents, much weaker than Tuesday's close of C$1.3305, or 75.16 US cents.
The currency's strongest level of the session was C$1.3265,
while it touched its weakest since March 1 at C$1.3525.
The loonie had gained against the US dollar on Tuesday, supported by expectations that Democratic presidential candidate Hillary Clinton was likely to prevail.
Canadian government bond prices were mixed across a steeper yield curve in sympathy with US Treasuries. The two-year price rose 3 Canadian cents to yield 0.567 percent and the benchmark 10-year declined 40 Canadian cents to yield 1.315 percent.
The 10-year yield touched its highest since May 31 at 1.332 percent.
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