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Forex - USD/CAD trims losses ahead of U.S. debt deal vote

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Forexpros - The U.S. dollar pared losses against its Canadian counterpart on Monday, as concerns over the possibility of a U.S. ratings downgrade curbed demand for higher yielding assets, ahead of a vote on a deal to raise the U.S. debt ceiling.

USD/CAD pulled back from 0.9490, the daily low, to hit 0.9525 during early U.S. trade, still down 0.29% on the day.

The pair was likely to find support at 0.9457, the low of July 28 and resistance at 0.9589, Friday's high and an eight-day high.

The greenback trimmed losses amid worries that a deal to raise the U.S. debt ceiling would not be sufficient to prevent ratings agencies from cutting the U.S. sovereign debt rating.

U.S. President Barack Obama and Senate leaders announced Sunday night that they had reached agreement on a framework deal that will cut spending and raise the USD14.3 trillion federal debt ceiling, in order to avert a U.S. default.

U.S. lawmakers were expected to narrowly pass the deal, which would cut about USD2.4 trillion from the deficit over the next decade, in a vote later Monday.

The Canadian dollar was also up against the euro, with EUR/CAD shedding 0.53% to hit 1.3682.

Also Monday, the U.S. Institute of Supply Management was to publish data on manufacturing activity.

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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.

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