The US dollar rose slightly on Tuesday before European markets opened. The USD/CAD pair bounced back from Monday’s seven-month low. It is now approaching the 1.3750–1.3765 zone, a key support area where buyers may face resistance.
Moody’s Downgrade and Debt Worries Weigh on Currency
Last week, USD/CAD fell 1.75%. Investors sold US assets after Moody’s downgraded US sovereign debt. Concerns also grew over President Trump’s planned tax-cut bill. The Congressional Budget Office forecasts the bill could add $3.8 trillion to US debt over ten years.
Canadian Dollar Softens on Oil and Rate Outlook
The Canadian dollar slipped modestly on Tuesday. Oil prices retreated from last week’s highs, reducing demand for the loonie. Traders also expect the Bank of Canada to cut rates after next month’s meeting. In the absence of strong economic data, these factors have dampened speculative demand for CAD.
US Economic Data to Guide Markets
Later today, investors will watch US durable goods orders and the Conference Board’s consumer confidence report. These releases should shed light on how trade policy and fiscal plans are affecting US manufacturing and consumer spending.
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