By Yasin Ebrahim
Investing.com – The dollar fell to a three-month low against the Canadian dollar Monday, adding to its losses over the past three weeks, but analysts warn of easing risk sentiment in the near term that will keep a lid on further downside.
USD/CAD fell 0.40% to C$1.3371, hitting its lowest since Mar. 4, shrugging of a fall in oil prices amid data showing Canadian housing starts bounced back last month.
Canadian housing starts bounced back to 193,500 in May after falling to 166,500 in April.
The surprising resilience in housing added to a string of recent near-term data flow that has "clearly been less discouraging than was expected even a few weeks ago," RBC said in a note.
Still, the loonie's current three-week winning streak against the greenback is likely to come under pressure over the near-term.
Easing risk-on market sentiment amid ongoing U.S.-China tensions and the threat of a second wave of infections will likely keep the loonie's advance in check, Commerzbank (DE:CBKG) said in a note.
USD/CAD is expected to stabilize at current levels "for the time being," the bank added.