The Canadian dollar retreated against its US counterpart on Monday, following a decline in the prices of crude oil as investors became concerned about growing global supply. The loonie moved further south after a meeting between finance ministers of member countries in the Group of Twenty ended with a decision to drop a pledge to support free trade.
The Group of Twenty released a statement that said the group will work on strengthening the contribution of trade to the economies of its members. The statement contained no mention of the group’s stance toward protectionism, which removes a promise that was made in 2016 to avoid all forms of protectionism.
This comes at a time when the United States displays a protectionist approach under the administration of President Donald Trump. Trump repeatedly accused a number of the world’s biggest economies of having unfair trade advantages, which reflected on the argument of his Treasury Secretary Steven Mnuchin in the meeting of G20.
The treasury secretary said that current international trade agreements place the United States at a disadvantage, and requested that the group pledge to ensure that global trade is fair. Leaders of the Group of Twenty will hold a meeting in Hamburg in July, which might shed more light on the exact terms of fair trade that the US demands.
USD/CAD traded at 1.3357 as of 20:10 GMT from 1.3362 at 12:45 GMT, the pair’s highest level since March 17. USD/CAD started trading today at 1.3334.
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