The U.S. fell to one-week lows against its Canadian counterpart on Monday, as demand for the greenback remained broadly under pressure after the Federal Reserve’s decision to leave interest rates unchanged, while higher oil prices boosted the Canadian currency.
USD/CAD hit 1.2803 during early U.S. trade, the pair’s lowest since June 13; the pair subsequently consolidated at 1.2785, declining 0.85%.
The pair was likely to find support at 1.2747, the low of June 13 and resistance at 1.2970, Friday’s high.
The greenback remained under pressure after the Fed left interest rates on hold last week and lowered forecast for how much they expect to hike interest rates in the next few years.
Investors were now eyeing testimony on monetary policy by Fed Chair Janet Yellen, due on Tuesday and Wednesday.
Meanwhile, market sentiment improved as concerns over a potential British exit from the European Union, or Brexit, eased over the weekend.
Two opinion polls published on Saturday showed that support for the 'Remain' campaign had regained its lead over a vote to leave, while a third showed momentum shifting in favor of a vote to remain in the 28 member bloc.
Campaigning for the June 23 referendum resumed on Sunday after a three-day break prompted by the killing of pro-EU British lawmaker, Jo Cox.
At the same time, the commodity-heavy Canadian dollar found support as the boost in risk appetite pushed oil prices sharply higher.
Also Monday, Statistics Canada said that wholesale sales rose 0.1% in April, disappointing expectations for an increase of 0.5%. Wholesale sales fell 0.8% in March, whose figure was revised from a previously estimated 1.0% drop.
The loonie was higher against the euro, with EUR/CAD shedding 0.23% to 1.4507.