USD/CAD bounces up from seven-month lows and approaches a previous support at 1.3760

• The US Dollar trims some losses, approaching a previous support at the 1.3750-1.3765 area

• Investors’ concerns about US debt are likely to weigh on the Dollar’s recovery attempts

• Later today, the US Durable Goods Orders and Consumer Confidence data might determine the US Dollar’s direction.

The US Dollar is showing marginal gains ahead of Tuesday’s European session opening. The USD/CAD is returning from the seven-month low hit on Monday, and nearing a previous support area in the 1.3750-1.3765 range, where bulls are likely to be challenged.

The Greenback lost 1.75% against the Canadian Dollar last week, with investors selling US assets afterMoody’s downgrade of the US debt rating and growing concerns about the impact of Trump’s sweeping tax bill on the US fiscal stability.

US debt concerns are weighing on the Dollar

Trump’s tax-slashing bill, which will be discussed at the US Senate during the next weeks, is expected to boost US debt by $3.8 trillion in the next 10 years, as figures by the US Congressional Budget Office show.

The Canadian Dollar is a tad softer on Tuesday, with Oil prices retreating from last week’s highs. In the absence of relevant macroeconomic releases, the mild retreat in crude prices and market expectations that the BoC will cut rates again after next month’s meeting are likely to undermine speculative demand for the CAD.

Later today, investors will be attentive to the US Durable Goods Orders and the Conference Board’s Consumer Confidence data. These figures will provide further clues about the impact of Trump’s erratic trade policies on manufacturing and consumption.