Canadian Inch Up During Uncertainty Over Trump Travel Ban

On Monday, the Canadian dollar inched higher against its U.S. counterpart, however, the gains were plugged as weakness in oil prices and doubt over a travel ban executed by U.S. President Donald Trump measured.

USD/CAD declined 0.18% at 1.3094, not far from intra-day lows of 1.3118, 1:51 AM (EST).

After Trump signed an executive order on Friday, the greenback stayed on the back foot that restricted immigration from seven predominantly Muslim countries, emphasizing concerns over the destabilizing effect of the new administration’s protectionist policies.

The directive prompted legal challenges, international criticism, extensive protests and confusion over its implementation at airports.

On Friday, sentiment on the dollar was also hit by data, presenting a sharp decline in U.S. fourth quarter progresses, driven speculation that the Fed Reserve will avoid hiking interest rates too fast.

Fed will hold its next policy meeting on Wednesday,  isn’t expected to increase interest rates, however, investors are eager  to hear how it views the economy and the future trail of interest rates.

Data on Monday indicated that U.S. consumer spending increased solidly in December, rising 0.5% after a 0.2% surge  in November.

Personal income increased 0.3%  the previous  month after edging up 0.1% in November.

Another  report  presented that U.S. pending home sales increased by 1.6% in December, ahead of predictions for a 1.1% increase.

In the meantime, prices of oil, a major Canadian export, stayed sluggish after a report presenting an increase in the number of active U.S. oil rigs the previous week,  added to worries about glut at a time when major producers are reducing production in a bid to support the market.

Statistics from Baker Hughes presented U.S. drillers added 15 oil rigs the prior week, taking the total to its highest since November 2015.

On Additional News

On Tuesday, the yen increase against the dollar as the Bank of Japan left its monetary policy and raised its growth predictions.

The greenback was off  0.11% at 113.65 yen at 02:15 ET.  The dollar index was off 0.03% at 100.39.

The Bank of Japan kept its excess reserve rate at minus -0.1%; 10-year bond yield goal at close to zero.

The greenback weakened as President Trump moved to sack the acting Attorney General, as she failed to endorse his travel ban.

The euro and sterling  were steady. The Bank of England is also anticipated to leave policy on hold on Thursday.

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