The US dollar received a bid against the loonie on a slight risk-off undertone in the markets this morning but gave back most of its intraday gains with the opening of the New York session, consolidating recent losses near multi-week lows.
While President Trump’s impeachment by the US House of Representatives failed to move the greenback, it seems that a slight decrease in risk appetite underpinned the currency which traded at 1.3117 against the Canadian dollar, as of 2:20 p.m. London time.
US 2-year yields and most major stock indices are modestly lower for the day, while higher oil prices failed to provide significant support for the Canadian dollar.
Although the House impeached Trump on two counts — on charges of abuse of power and obstructing Congress — Republicans who have the majority in the Senate will probably acquit him. This is perhaps the main reason behind greenback’s resilience to move on the news.
Another report from the US today include the Manufacturing Index for December, with forecasts of 8.1 index points, down from 10.4 in November.
From Canada, markets await tomorrow’s retail sales figures which are expected to increase by 0.5% after a fall of 0.1% in September. Core retail sales are expected to match forecasts of a 0.2% rise.
From a technical standpoint, the USD/CAD pair retains a soft undertone after breaking below the December 16 low of 1.3115. The RSI followed the price in making a fresh low was approaching oversold levels with a reading of 36.37 at the time of writing.
To the downside, the US dollar could pick up some support at the lower 1.30s — an area that aligns with the profit-target projected from the H&S pattern – while the Canadian dollar looks well supported below the 1.3150 level.
