The Canadian dollar was almost unchanged on Monday against its broadly weaker U.S. counterpart as growing doubts over the Trump administration’s ability to push through its economic agenda continued to dominate market sentiment.
USD/CAD was at 1.3369 by 09.33 ET, not far from Monday’s close of 1.3375. The pair traded in a range of 1.3414 to 1.3365.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 98.97. The index plumbed 98.67 on Monday, its lowest trough since November 11.
The dollar remained on the defensive after the failure of U.S. Republicans to get enough support for their own bill to overhaul healthcare rattled investors.
The setback for the White House added to scepticism over the Trump administration’s ability to work with Congress to deliver on the president’s pro-growth economic agenda, including tax cuts and infrastructure spending.
The dollar index had surged to almost 14-year highs in early January propelled higher by expectations for a strong economic recovery and higher inflation, the so-called ‘Trump Trade’.
But the greenback found some support after remarks by Federal Reserve officials shifted investor focus back to the prospect of more U.S. interest rate hikes.
The loonie, as the Canadian dollar is also known, was supported by higher prices for oil, a major Canadian export.
Oil prices were boosted by hopes that an OPEC-led production cut, aimed at cutting a global supply glut and supporting the market will be extended through the end of the year.