Forex - USD/CAD slips lower after U.S. housing data

© Reuters. Greenback loses ground vs. loonie as U.S. data weighs

Investing.com - The U.S. dollar slipped lower against its Canadian counterpart on Monday, after the release of disappointing U.S. housing data.

USD/CAD hit 1.3131 during early U.S. trade, the session low; the pair subsequently consolidated at 1.3151, edging down 0.13%.

The pair was likely to find support at 1.3036, Friday's low and resistance at 1.3270, the high of October 2.

Data on Monday showed that U.S. new home sales dropped 11.5% last month to 468.000 units from a revised total of 529.000 units in August. Analysts had expected new home sales to slip 0.4% to 550.000 in September.

The greenback rallied late last week after European Central Bank President Mario Draghi signaled that further monetary easing is likely later this year.

The comments underlined the diverging monetary policy stance between the Federal Reserve and other central banks. The Fed is currently expected to start hiking interest rates sometime in early 2016.

On Friday, the People’s Bank of China unexpectedly cut interest rates in an effort to shore up slowing growth in the world’s second largest economy.

It was the sixth rate cut since last November, reinforcing the divergence in monetary policy between the U.S. and central banks in the rest of the world.

Investors were looking ahead to Wednesday’s monetary policy announcement by the Fed for fresh indications on the timing of an initial rate hike.

But the Canadian dollar's gains were limited by declining oil prices. Crude oil futures for December delivery were down 1.01% at $44.15 at the open of U.S. trading.

The loonie was lower against the euro, with EUR/CAD edging up 0.15% to 1.4528.