The U.S. dollar surged to its highest level against its Canadian counterpart in more than a year on Tuesday after the United States imposed duties on Canadian softwood, while the dollar hit a two-week high against the yen on greater risk appetite.
The greenback hit C$1.3615, its highest level against the loonie since late Feb. 2016. U.S. Commerce Secretary Wilbur Ross said Monday the United States will impose preliminary anti-subsidy duties averaging 20 percent on imports of the softwood lumber. The dollar was last up 0.53 percent against the Canadian dollar at $1.357.
The move, which affects some $5.66 billion worth of imports of the construction material, set a tense tone as the two countries and Mexico prepare to renegotiate the 23-year-old North American Free Trade Agreement.
"It reflects what is going to happen with the trade relationships for the U.S. and its neighbor," said Sireen Harajli, FX strategist at Mizuho in New York. "This is a negative reflection on that trade relationship."