The U.S. dollar edged down to a one-week low against its Canadian counterpart on Friday, as investors awaited the release of U.S. manufacturing data later in the day, but losses were expected to remain limited by sustained cautions after the Brexit vote.
Trading volumes were expected to remain thin with Canadian markets closed for Canada Day.
USD/CAD hit 1.2911 during early U.S. trade, the pair’s lowest since June 24; the pair subsequently consolidated at 1.2892, shedding 0.23%.
The pair was likely to find support at 1.2714, the low of June 24 and resistance at 1.3108, the high of June 28.
Markets were still recovering from Britain’s shock decision last week to leave the European Union.
Bank of England Governor, Mark Carney, indicated on Thursday that more stimulus may be needed over the summer, sparking expectations for an upcoming rate cut.
Investors also remained cautious after downbeat Chinese manufacturing data sparked fresh concerns over a slowdown in the world’s second largest economy.
Data on Friday showed that China’s Caixin manufacturing purchasing managers’ index fell to 48.6 in June from 49.2 the previous month, compared to expectations for a downtick to 49.1.
At the same time, China’s official manufacturing PMI came in at 50.0 last month from 50.1 in May, in line with expectations.
The loonie was lower against the euro, with EUR/CAD rising 0.28% to 1.4392.