Investing.com - The U.S. dollar rose to one-week highs against its Canadian counterpart on Wednesday, after the release of weak U.S. and Canadian trade data, as mounting concerns over the economic consequences of the Brexit vote weighed on demand for risk-related assets.
USD/CAD hit 1.3047 during early U.S. trade, the pair’s highest since June 28; the pair subsequently consolidated at 1.3013, gaining 0.22%.
The pair was likely to find support at 1.2847, Tuesday’s low and resistance at 1.3120, the high of June 27.
The U.S. Bureau of Economic Analysis said the trade deficit widened to $41.14 billion in May from $37.38 billion in April, whose figure was revised from a previously estimated deficit of $37.40 billion.
Analysts had expected the trade deficit to widen to $40.00 billion in May.
At the same time, Statistics Canada said the country’s trade deficit narrowed to C$3.28 billion in May from C$3.32 billion in April, whose figure was revised from a previously estimated deficit of C$2.94 billion.
Analysts had expected the trade deficit to narrow to C$2.70 billion in May.
But market sentiment remained weak as Britain’s shock decision to leave the European Union continued to fuel uncertainty over the consequences of the U.K. vote on the country’s economy and the global economy as a whole.
The Bank of England warned on Tuesday of “challenging” risks to financial stability following the Brexit vote and eased regulatory requirements on the banking sector.
BoE Governor Mark Carney said the move represented a "major change" that would help the economy to cope with the Brexit consequences.
New York Federal Reserve President William Dudley said on Tuesday that the U.S. economy was on the right track but added that any signs of post-Brexit instability in the EU could have more severe consequences for the U.S.
Separately, risk aversion and renewed supply glut concerns pushed oil prices lower on Wednesday, which also contribued to weakening the commodity-related Canadian dollar.
The loonie was also lower against the euro, with EUR/CAD rising 0.31% to 1.4421.