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Forex - USD/CAD drops to 1-week low as greenback pressured

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Forexpros - The broadly weaker U.S. dollar was down against its Canadian counterpart on Wednesday, dropping to a one-week low as risk appetite improved following the disappointing outcome of the previous day's France-German summit meeting.

USD/CAD hit 0.9775 during U.S. morning trade, the lowest since August 10; the pair subsequently consolidated at 0.9797, declining 0.27%.

The pair was likely to find support at 0.9765, the low of August 10 and resistance at 0.9905, the high of August 15.

The U.S. Bureau of Labor Statistics said earlier that producer price inflation rose by a seasonally adjusted 0.2% in July, after declining by 0.4% in June.

Analysts had expected PPI to rise 0.1% in July.

Year-over-year, the producer price index rose at an annualized rate of 7.2% in July, above expectations for a gain of 7.0%.

Core PPI, which excludes food and energy costs, rose by 0.4% after rising by 0.3% in the preceding month. Analysts had expected core PPI to rise by 0.2%.

Meanwhile, Statistics Canada said that foreign investors' acquisitions of Canadian securities fell by a seasonally adjusted CAD3.46 billion in June, confounding expectations for acquisitions of CAD10.33 billion.

The previous month's figure was revised down to CAD15.34 billion from CAD15.40 billion.

The loonie was also boosted after crude oil for delivery in October jumped 1.69% to trade at USD88.61 a barrel on the New York Mercantile Exchange, the highest price since August 4.

Raw materials, including oil account for about half of Canada's export revenue.

Elsewhere, the Canadian dollar was down against the euro, with EUR/CAD edging 0.25% higher to hit 1.4191.

The single currency found support amid speculation the European Central Bank was buying Italian and Spanish government debt, in an effort to ease pressure on the region's third and fourth largest economies.

Later in the day, the U.S. was to produce government data on crude oil stockpiles, which can be a big market mover for the Canadian dollar, due to the size of Canada's energy sector.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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