Investing.com - The U.S. dollar was lower against the Canadian dollar on Tuesday after weak U.S. manufacturing data on Monday sparked concerns over a possible slowdown the nation’s economic recovery.
USD/CAD hit session lows of 1.1062 and was last down 0.36% to 1.1076.
The pair was likely to find support at 1.1040, Monday’s low and resistance at 1.1132, Monday’s high.
Investors remained wary after weak U.S. factory data on Monday reinforced negative investor sentiment in the wake of a broad based selloff in emerging markets.
A report by the Institute of Supply Management showed that its manufacturing index fell to a seven-month low in January, as new orders slumped.
The data sparked concerns over the outlook for the economic recovery, ahead of Friday’s U.S. jobs report for January, after December’s report showed that the economy added far fewer jobs than expected.
The loonie, as the Canadian dollar is also known, was also boosted by hopes that the proposed TransCanada Keystone XL pipeline would get U.S. approval, which would boost Canadian crude oil exports.
Elsewhere, the loonie was higher against the euro, with EUR/CAD down 0.43% to 1.4974.
The euro remained under pressure after data late last week showed that the annual rate of euro area inflation slowed to 0.7% in January from 0.8% in December. The weak data sparked concerns that the European Central Bank may tighten policy in order to stave off the risk of deflation in the region, ahead of its upcoming policy meeting on Thursday.