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Forex - Broadly weaker greenback hits 2-week lows vs. loonie

Published 08/18/2017, 09:29 AM
Updated 08/18/2017, 09:29 AM
© Reuters.  Greenback moves sharply lower vs. loonie in early trade

© Reuters. Greenback moves sharply lower vs. loonie in early trade

Investing.com - The U.S. dollar dropped to two-week lows against its Canadian counterpart on Friday, after the release of tepid Canadian inflation data, as geopolitical risks and U.S. political tensions weighed broadly on the greenback.

USD/CAD hit 1.2575 during early U.S. trade, the pair’s lowest since August 4; the pair subsequently consolidated at 1.2588, retreating 0.72%.

The pair was likely to find support at 1.2553, the low of August 4 and resistance at 1.2733, the high of August 14.

Geopolitical tensions took center stage on Friday after a van rammed into pedestrians in a crowded tourist area of Barcelona on Thursday evening, killing at least 14 people and injuring 100 others.

Shortly after, a second attack was perpetrated in Cambrils, a coastal town south of Barcelona, where police said they killed five attackers.

So far three men have been arrested as country-wide anti-terror operations remain underway, according to local officials.

The Islamic State claimed responsibility for the incident, though the claim has not been verified.

In Canada, official data showed that inflation registered no change in July.

But the commodity-related Canadian dollar was supported by a rise in oil prices on Friday, although concerns over increasing U.S. production levels lingered.

Meanwhile, sentiment on the greenback remained vulnerable amid concerns U.S. President Donald Trump will not be able to implement his agenda, as he faces mounting opposition including from within his own political party.

Eight chief executives quit two business advisory councils on Wednesday, in protest over Trump’s controversial remarks on weekend violence in Virginia.

Republican Senator Bob Corker also made headlines this week when he slammed Trump's handling of the protests in Charlottesville, saying that the President "has not yet been able to demonstrate the stability nor some of the competence that he needs to demonstrate in order to be successful,."

The dollar had already weakened after the Federal Reserve’s July policy meeting released on Wednesday showed that policymakers remain concerned over low levels of inflation, which could mean the central bank may avoid raising rates again this year.

The loonie was also higher against the euro, with EUR/CAD declining 0.58% to 1.4781.

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