The U.S. dollar fell to one-week lows against its Canadian counterpart on Monday. as rising oil prices lent support to the commodity-related Canadian currency, although ongoing concerns over the global consequences of the Brexit vote still lent some support to the greenback.
USD/CAD hit 1.2851 during early U.S. trade, the pair’s lowest since June 24; the pair subsequently consolidated at 1.2862, sliding 0.37%.
The pair was likely to find support at 1.2714, the low of June 24 and resistance at 1.3016, the high of June 30.
Oil prices were supported on Monday, as news of a larger than expected drop in U.S. inventories last week and supply disruptions in Nigeria pushed the commodity closer to the $50 a barrel threshold.
But investors remained cautious as Britain’s shock decision to leave the European Union fuelled uncertainty over the consequences of the U.K. vote on the country’s economy and the global economy as a whole.
Market participants were looking ahead to the Bank of England’s financial stability report due on Tuesday for fresh clarity on the health of the U.K. banking sector in the wake of the Brexit vote.
BoE Governor Mark Carney indicated late last week that more stimulus may be needed over the summer, sparking expectations for an upcoming rate cut.
The loonie was higher against the euro, with EUR/CAD declining 0.49% to 1.4316.
In the euro zone, data earlier showed that the number of unemployed people in Spain declined by 124,300 in June, blowing past expectations for a 74,300 fall and after a 119,800 drop the previous month.