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Forex - Broadly weaker greenback drops against loonie

ForexJun 28, 2017 09:26AM ET
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© Reuters. Greenback loses ground against loonie amid U.S. political woes

Investing.com - The U.S. dollar dropped against its Canadian counterpart on Wednesday, as sentiment on the greenback remained weak following a delay in a highly-anticipated U.S. healthcare vote on Tuesday.

USD/CAD hit 1.3076 during early U.S. trade, the pair’s lowest since February 24; the pair subsequently consolidated at 1.3104, sliding 0.72%.

The pair was likely to find support at 1.3054, the low of February 24 and resistance at 1.3199, the session high.

The greenback weakened broadly after U.S. Senate Republicans postponed a vote on the Trump administration’s healthcare bill on Tuesday, as they faced resistance from party members.

Investors are concerned that the administration will not be able to implement tax cuts and fiscal stimulus steps, without first getting the healthcare bill passed.

The loonie was higher against the euro, with EUR/CAD retreating 0.76% to 1.4867.

The euro had initially strengthened after European Central Bank President Mario Draghi said on Tuesday factors weighing on inflation in the euro area were mainly temporary, adding that the bank could look through them.

He also said the ECB’s stimulus will be gradually withdrawn as the euro zone economy improves.

The comments fueled speculation that the central bank could soon unwind its quantitative easing program.

The single currency reversed gains after Bloomberg reported on Wednesday that ECB sources said market misinterpreted Draghi's remarks.

The speech "was intended to strike a balance between recognizing the currency bloc's economic strength and warning that monetary support is still needed" Bloomberg said.

Forex - Broadly weaker greenback drops against loonie

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