The Canadian dollar slipped on Wednesday against its major counterparts as the U.S. government shutdown reached its second day, Bloomberg reports.
Concerns are growing about the ongoing impasse between feuding political parties becoming involved with debt ceiling negotiations later this month. The loonie marked a third-straight day of losses against the world's reserve currency as the U.S. Federal Reserve is believed to be pondering slimming down monetary policy, such as quantitative easing programs.
"The longer this goes on, the weaker the U.S. economy is going to end up being, and that's going to weigh on Canada as well," senior economist and foreign exchange strategist Benjamin Reitzes with BMO Capital Markets in Toronto told Reuters on Wednesday. "It just pushes out any expected … policy tightening of QE tapering in the U.S. and eventual rate hikes in Canada."
The Canadian dollar was down about 0.2 percent against the U.S. dollar.
Investors and analysts are becoming increasingly concerned about the impact of the U.S. government shutdown on the global economy amid the recovery from the Great Recession, according to Reuters.
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