By Ketki Saxena
Investing.com — The Canadian Dollar weakened against its US counterpart today, hitting a one month low, as the Bank of Canada’s Business Outlook survey showed souring business sentiment.
The commodity heavy Canadian index was also pressured by weakness in crude, as investors took profits following last week’s 2% rally, despite the escalation of conflict in the Middle East and rising worries of supply disruptions due to Houthi militant led attacks on Red Sea (NYSE:SE) shipping.
The US dollar meanwhile was higher across the board, as rising tensions related to the Red Sea attacks fanned risk aversion, supporting the safe haven greenback.
Trading volumes however remained thin due to the US Martin Luther King Day Federal holiday.
Up next for the USDCAD pair, all eyes will be on Tuesday’s domestic CPI print, which is expected to tick higher from 3.1% to 3.3% on an annualized basis.
On a technical level for the pair, analysts at Scotiabank (TSX:BNS) note that “Choppy trading late last week clouds the very near-term technical outlook for the USD but broader (weekly) signals remain USD-bullish and suggest corrective pressure for a higher USD should be sustained.”
They recommend that traders “Look for support on USD dips to the mid-1.33s and (stronger) at 1.3275/1.3300.”
“Above 1.3450 targets 1.3538 (50% retracement resistance)”.