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Dollar Struggles To Hold Gains, as USD/CAD Adds to Losses

11/9/2017, 9:59:57 AMBasics of Trading
Dollar Struggles To Hold Gains, as USD/CAD Adds to Losses

 The dollar traded roughly unchanged on Wednesday as traders fretted over a possibility delay to President Donald Trump’s tax reform plan while a surge in the Canadian dollar weighed on the greenback.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.04% to 94.77.

It was a quiet day on the economic calendar for top-tier data, investors milled over media reports suggesting that the Senate GOP are considering a one-year-delay in the implementation of corporate tax cuts.

Also weighing on the dollar was a sharp move higher in the Canadian dollar after housing data topped expectations.

Statistics Canada reported on Wednesday that building permits increased 3.8% in September, confounding expectations for a 0.2% fall while a separate report showed housing starts increased by 222.800 units last month, beating expectations for a 210,000 rise.

USD/CAD fell 0.41% to C$1.2729.

The move lower comes as the investor attention shifted to President Donald Trump’s arrival in China, where the president is expected to have lengthy discussions on North Korea with Chinese president Xi Jinping.

The Sterling, meanwhile, continued to add Tuesday’s losses against the dollar falling 0.43% to $1.3110 on signs that brexit negotiations were staring to sour.

"The fears over a potential Brexit no-deal are rising, as we move within 16 months of the UK’s exit from the EU," said Joshua Mahony, market analyst at IG.

EUR/USD tacked on 0.08% to $1.1595 while EUR/GBP rose 0.49% to £0.8844.

USD/JPY fell 0.22% to Y113.75.