By Ketki Saxena
Investing.com -- The Canadian dollar weakened against its US counterpart to a near three-month low, as the greenback rallied against a basket of currencies further to remarks from Fed Chair Jerome Powell at Jackson Hole in Wyoming.
Powell's message had something in it for both bulls and bears, stating that policymakers would "proceed carefully as we decide whether to tighten further," but also reiterated that the Central Bank has not yet decided whether interest rates are restrictive enough to bring inflation back to 2%.
The Canadian dollar meanwhile gained little support from crude prices, which touched a one-week high, or gains in equities.
"Canada doesn't have that much working in its favor," noted Marc Chandler, chief market strategist at Bannockburn Global Forex LLC.
"Oil has come off of its (recent) highs, U.S. rates are rising. The stock market is up a little bit today but the real story is its recent pullback."
For the week, the Canadian currency closed its six consecutive week of declines - its longest weekly losing streak since May 2022.
Analysts at Forex.com note that the USD/CAD pair remains "one of the more attractive venues for scenarios of continued USD strength."
On a technical level, they note that "Continued defense of the 1.3500 support zone would be key for [USD strength] to continue, although there could be scope for support at the 1.3412 spot if prices do pose a deeper pullback."
"Given how quickly the bullish trend has priced-in there could reasonably be some concerns of the move getting overcrowded so even if the pullback does extend – bulls showing a response to support could keep the trend pushing."