The Canadian dollar edged higher against its US counterpart on Friday, recovering from an earlier three-week low after reports that a deal was reached to remove tariffs on its metals that had been imposed by the United States. US officials have agreed to remove tariffs on steel and aluminum imported from Canada and Mexico in 48 hours, paving the way for the three North American counties to enact a new trade pact, the Washington Post and Politico reported.
At 1:02 p.m. (1702 GMT), the Canadian dollar was trading 0.1% higher at 1.3457 to the greenback, or 74.31 US cents. For the week, the loonie was down 0.3%. Canadian government bond prices were lower across a flatter yield curve, with the two-year down 4 Canadian cents to yield 1.608% and the 10-year declining 10 Canadian cents to yield 1.689%.
The gap between the 2- and 10-year yields narrowed by 1.1 basis points to a spread of 8.1 basis points in favor of the longer-dated bond. Canada's interest rate markets are due to close early ahead of the Victoria Day holiday on Monday.