2023.05.1709:21:00UTC+00Canadian Dollar Drops Amid Weaker Oil Prices, Debt Ceiling Worries

The Canadian dollar slipped against its most major counterparts in the European session on Wednesday, as oil prices fell and uncertainty about U.S. debt ceiling negotiations dampened risk sentiment.

Crude for June delivery fell $0.36 to 76.50 per barrel.

Oil prices dropped as data from the American Petroleum Institute showed an unexpected build in U.S. crude stocks.

President Joe Biden cut short his planned Asia trip and will return to the U.S. on Sunday as the clock ticks towards the deadline.

House Speaker Kevin McCarthy said there is "a lot of work to do" to reach a deal for raising the debt ceiling.

The loonie touched 1.3535 against the greenback, setting a 2-day low. If the loonie slides further, 1.38 is possibly seen as its next support level.

The loonie was down against the euro, at 1.4661. On the downside, 1.48 is likely seen as its next support level.

The loonie retreated to 0.8975 against the aussie, from an early multi-week high of 0.8952. Next key support for the currency is likely seen around the 0.92 level.

In contrast, the loonie remained higher against the yen and was trading at 101.43. The currency is seen finding resistance around the 0.92 level.

Looking ahead, U.S. building permits and housing starts for April are set for release in the New York session.