USD/CAD lower as US Congress debated on debt

US dollar lost ground against its Canadian rival on Wednesday, as Senate leaders in the United States were in a rush to end the partial government shutdown and avert a potential default.

USD/CAD slipped to a session low at 1.0353 at 13:59 GMT, after which consolidation followed at 1.0364, falling 0.15% for the day. Support was likely to be received at October 15th low, 1.0330, while resistance was to be met at October 15th high, 1.0390.

The Canadian currency gained positions for a third day against the greenback, as Senate leaders in the United States were rushing to reach an agreement in order to end the fiscal crisis, as the latter gained intensity after Republicans’ last minute deal failed on Tuesday. The US Treasury has warned that if an agreement to increase the 16.7-trillion-USD debt ceiling is not reached before Thursday’s deadline, the nation will confront an unprecedented sovereign debt default. The emerging Senate accord might be announced as early as today, though its passage in the Republican-led House of Representatives was still far from assured.

“America is home to the Hail Mary touchdown pass, the 11th-hour deal, and all you’re seeing here is not necessarily posturing, but the creation of atmosphere for a dramatic agreement to come in at the last minute,” said Brad Schruder, a director of foreign exchange at Bank of Montreal, by phone from Toronto, cited by Bloomberg. “When that deal does get done, whether it gets done before this self-imposed deadline or not, you should see the Canadian dollar do better against the U.S. dollar.”

Meanwhile, in Canada, a report showed that nations manufacturing sales decreased unexpectedly for the first time in the past four months in August, as weaker sales of jewelry and products made out of silver contributed the record drop of overall sales in almost all related industries. Manufacturing shipments decreased 0.2% to reach 49.49 billion CAD in August, after the 1.7% climb, registered during the preceding month. The volume of sales, used by experts for the purpose of evaluating Canadian Gross Domestic Product, decreased 0.3%. Analysts from the Royal Bank of Canada had anticipated that manufacturing shipments will rise 0.2% in August. Shipments appeared to have fallen in 11 out of 21 industrial sectors, which comprise about 40% of the entire Canadian manufacturing.

Elsewhere, the loonie, as Canadian dollar is also nicknamed, was higher against the euro, with EUR/CAD cross falling 0.24% on a daily basis to trade at 1.4012 at 14:34 GMT. GBP/CAD pair was losing 0.42% to trade at 1.6545 at 14:37 GMT.