TORONTO, Oct 27 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Monday as investors brushed aside the threat of additional U.S. tariffs on Canadian goods and awaited a Bank of Canada interest rate decision this week.
The loonie was trading nearly unchanged at 1.3998 per U.S. dollar, or 71.44 U.S. cents, after moving in a range of 1.3971 to 1.4010.
U.S. President Donald Trump said on Saturday he was increasing tariffs on Canada by an additional 10% "above what they're paying now," as he reacted again to an ad by Canada's Ontario province, a day after it was aired during the Major League Baseball World Series broadcast.
It was not clear what goods would be affected by the newly announced tariffs. The majority of Canadian exports to the U.S. are exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA).
"I just think the tariff threat has lost its teeth and it couldn't be any more clear than it was in the Canadian dollar trade today, as the market has collectively shrugged off the threat almost completely," said Adam Button, chief currency analyst at investingLive.
Economists expect the Bank of Canada to cut interest rates further on Wednesday in response to rising unemployment and a slowdown in the economy. Last month, the central bank lowered its benchmark rate to a three-year low of 2.50%.
Canadian wholesale trade was largely unchanged in September from August, a preliminary estimate showed.
The U.S. dollar (.DXY), opens new tab edged lower against a basket of major currencies as optimism over a possible U.S.-China trade deal boosted risk appetite.
The price of oil, one of Canada's major exports, was trading 0.1% lower at $61.46 a barrel, giving back a small part of last week's gains.
Canadian bond yields moved lower across the curve. The 10-year was down 2.8 basis points at 3.059%, while it fell 3.1 basis points further below its U.S. equivalent to a gap of 94.1 basis points.
Reporting by Fergal Smith in Toronto; Editing by Nia Williams
