USD/CAD lower during US bank holiday

The US dollar lost ground on its Canadian counterpart today, and looked set to stay within a narrow range as US markets were closed for the country’s Memorial Day holiday.

USD/CAD reached 1.0224 during European trading this afternoon, the lowest the pair has been since 23 May; however, they subsequently consolidated at 1.0253, losing 0.39 per cent. The pair was expected to see support at 1.0202, the 23 May low, and resistance at the session high of 1.0270.

Demand for the greenback, seen as a safe haven, was hit earlier as concerns about the possibility of Greece departing the eurozone calmed after weekend polls revealed increasing support for the New Democracy pro-bailout party ahead of elections scheduled to be staged in 17 June.

However, market sentiment stayed fragile amid uncertainty about the outcome of the elections, while worries about the health of the banking sector in Spain and the country’s mounting borrowing costs also had an impact.

The government of Spain announced over the weekend that it planned to recapitalise one of its largest commercial lenders, triggering fresh concerns that the increasing cost of bank rescues may lead to Madrid seeking an international bailout.

The Canadian dollar was higher versus the euro, with EUR/USD falling 0.19 per cent to 1.2860. trade was expected to remain quiet today, with neither the US or Canada set to release any notable economic data, while the holiday in the US meant liquidity was expected to remain high.