TORONTO, April 2 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday as investors globally awaited the announcement of sweeping new U.S. tariffs that could escalate a trade war.
The loonie was trading 0.1% lower at 1.4315 per U.S. dollar, or 69.86 U.S. cents, after moving in a range of 1.4290 to 1.4334.
U.S. President Donald Trump has kept investors guessing on the details of the tariff plans, which were still being formulated ahead of a White House Rose Garden announcement ceremony scheduled for 4 p.m. ET (2000 GMT).
A separate 25% global tariff on U.S. auto imports is due to take effect on April 3. Canada sends about 75% of its exports to the United States, including autos and oil, and is expected to impose countermeasures.
"The foreign exchange market reaction could prove complex and counter-intuitive," Karl Schamotta, chief market strategist at Corpay, said in a note.
"Although it might seem obvious that the euro, Canadian dollar, and Mexican peso could rally in response to a more conciliatory tone from the president, it's almost impossible to know how much is already priced in."
The Bank of Canada has said it needs to ensure higher prices from tariffs do not spread. Investors see a 56% chance the central bank will pause its interest rate cutting campaign at a policy decision on April 16.
The U.S. dollar (.DXY), fell against a basket of major currencies, while oil was trading 0.5% higher at $71.58 a barrel as investors shrugged off mostly bearish U.S. government data on inventory.
Canadian bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year yield was up 2.5 basis points at 2.955%, after earlier hitting its lowest level since March 5 at 2.880%.
Reporting by Fergal Smith; Editing by Chris Reese
