By TraderVox.com
Tradervox.com (Dublin)- The Canadian dollar has declined to its lowest in eight weeks against the US dollar as global reports indicate global manufacturing is slowing. The loonie fell for the second day as manufacturing and services report from euro zone showed a decline to its lowest in more than three years. Another report showing a decline in China’s manufacturing is expected to be released while US leading economic indicator index fell in August and the manufacturing dropped in September. These reports are indicating global slowdown in manufacturing, leading to a decline in risk related currencies such as the loonie.
The Canadian currency declined by 0.4 percent against the US dollar yesterday to trade at 97.79 cents per dollar after declining by as much as 0.7 percent during the day to its July 23 low. According to technical Analyst Shaun Osborne, the USD/CAD cross is approaching short-term resistance in the range between 98.40 and 98.60 where the 200 SMA resides. He also added that a push back from this resistance range would push the cross down to support at 97.
Shaun Osborne, who is the Chief Currency Strategist in Toronto at TD Securities, noted that the Loonie has continued to decline to the higher end of 97 cents per dollar, where it has sustained the move which exposes it to further loss to 99.02 cents. He also added that the general flow of news suggests that the dollar-loonie will move higher. The pair is seen consolidating after breaking above the September Channel, which it has extended after breakout during the Sept. 20 session. The 14-day Relative Strength is moving close to 70 showing that there is a bullish momentum according to the chart.
Some of the factors affecting the pair include the risk-off tone in the market and the prices of crude oil which have declined for four days now.
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