Temporary strength in Canada's currency brought the US dollar-loonie long trade promoted last week by UBS Investment Research to hit its stop loss level of C$1.38, according to a note Friday.
Canada's temporary exemption from the 50% tariffs announced by President Donald Trump under Section 338 gave the country's dollar some support, according to UBS. The greenback was dented by the US Treasury, it added.
UBS initiated its trade at C$1.393. It still expects the pair to move back toward C$1.39, as renewed weakness in the loonie could emerge amid continued uncertainty around Canada's growth outlook, the bank said.
The Canadian currency was down about 0.4% early Friday to trade at C$1.374.