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Forex - USD/CAD at multi-year low as debt woes hit greenback

Published 07/26/2011, 09:30 AM
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Investing.com – The U.S. dollar fell to a more than three-and-a-half year low against its Canadian counterpart on Tuesday, as talks aimed at raising the U.S. debt ceiling remained deadlocked.

USD/CAD hit 0.9407 during early U.S. trade, the pair’s lowest since November 9, 2007; the pair subsequently consolidated at 0.9430, shedding 0.45%.

The pair was likely to find support at 0.9200, the low of November 6, 2007 and resistance at 0.9512, the high of July 20.

On Monday, U.S. President Barack Obama warned that failure to increase the U.S. borrowing limit would severely damage the economy and called on Congress to compromise, in order to avert a "reckless and irresponsible" national default ahead of the August 2 deadline.

The greenback briefly trimmed losses earlier after a U.S. report showed that the S&P/Case-Shiller home price index fell slightly more-than-expected in May, declining for the eleventh consecutive month.

Standard & Poor with Case-Shiller said its house price index fell by 4.5% in May, above expectations for a 4.4% decline.

Meanwhile, the Canadian dollar was lower against the euro, with EUR/CAD easing up 0.13% to hit 1.3639.

Later in the day, the U.S. was to publish data on consumer confidence as well as government data on new home sales.

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