Investing.com - The U.S. dollar dropped to a one-and-a-half week low against its Canadian counterpart on Wednesday, as markets were digesting news that China devalued its currency for the second consecutive day.
USD/CAD hit 1.2955 during early U.S. trade, the pair's lowest since July 31; the pair subsequently consolidated at 1.3004, retreating 0.84%.
The pair was likely to find support at 1.2858, the low of July 29 and resistance at 1.3158, the session high.
The dollar hit a four-year high against the yuan after the People's Bank of China set the yuan's midpoint rate weaker than at Tuesday's closing.
China devalued its currency by 2% in a surprise move on Tuesday to make its exports more competitive and shore up growth in the flagging economy.
The PBOC has described the move as a “one-off depreciation”, based on a new way of managing the exchange rate that better reflected market forces.
The loonie was lower against the euro, with EUR/CAD adding 0.20% to 1.4511.