Investing.com - The U.S. dollar trimmed losses against its Canadian counterpart, as upbeat U.S. economic growth data boosted optimism over the strength of the economy, although an improvement in overall market sentiment still lent support the Canadian currency.
USD/CAD eased off 1.2967, the session low, to hit 1.3052 during early U.S. trade, still down 0.15%.
The pair was likely to find support at 1.2714, the low of June 24 and resistance at 1.3144, the high of June 2.
The third estimate of first quarter U.S. growth domestic product showed growth of 1.1%, revised up from the initial reading of a 0.8% rise. Analysts had expected growth to settle at 1.0%.
However, real consumer spending for the first three months of the year was revised down to 1.5%, from the prior reading of 1.9%. Economists had forecast an upward revision to 2.0%
Meanwhile, market sentiment continued to strengthen as concerns sparked by Britain’s decision last week to leave the European Union began eased.
Global stock markets suffered the largest two-day rout ever on Friday and Monday, as a wave of selling wiped around $3 trillion from markets.
Ratings agencies Standard & Poor’s and Fitch Ratings both downgraded their credit ratings for the U.K. on Monday and warned that further cuts are possible.
S&P, the only major ratings agency to maintain a Triple A rating for the U.K., cut its rating by two notches to AA, warning that Brexit posed a risk to the constitutional and economic integrity of the U.K.
Fitch lowered its rating from AA+ to AA, forecasting an "abrupt slowdown" in growth in the short-term.
The improvement in market sentiment also pushed oil prices higher, which in return lent support to the commodity-related Canadian dollar.
The loonie was lower against the euro, with EUR/CAD adding 0.25% to 1.4435.