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Forex - Greenback drops to 1-month lows vs. loonie

Published 09/18/2015, 09:26 AM
Updated 09/18/2015, 09:26 AM
Greenback hits 1-month trough vs. loonie after Fed holds rates

Greenback hits 1-month trough vs. loonie after Fed holds rates

Investing.com - The U.S. dollar dropped to one-month lows against its Canadian counterpart on Friday, as the Federal Reserve's decision to hold interest rates weighed broadly on the greenback.

USD/CAD hit 1.3012 during early U.S. trade, the pair's lowest since August 19; the pair subsequently consolidated at 1.3051, tumbling 1.01%.

The pair was likely to find support at 1.2955, the low of August 13 and resistance at 1.3207, Thursday's high.

The greenback weakened broadly after the Fed kept interest rates unchanged on Thursday, but losses were limited as the central bank left open the possibility of a rate hike later this year.

Speaking after the rate statement, Fed Chair Janet Yellen said global economic developments played a major part in the central bank's decision.

In deciding when to raise interest rates, the Fed repeated it wanted to see "some further improvement in the labor market" and be "reasonably confident" that inflation will increase.

In Canada, data on Friday showed that the consumer price index was flat last month, compared to expectations for a 0.1% uptick. On a yearly basis, consumer prices rose 1.3% in August, in line with expectations.

Core CPI, which excludes the eight most volatile items, gained 0.2% in August, as exected, and increased by 2.1% on a yearly basis.

The loonie was higher against the euro, with EUR/CAD plummeting 1.18% to 1.4894.

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