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Forex - USD/CAD almost unchanged amid Italy concerns

Published 11/07/2011, 08:49 AM
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Investing.com - The U.S. dollar was steady against its Canadian counterpart on Monday, as uncertainty over political turmoil in Italy weighed on demand for higher yielding assets.

USD/CAD hit 1.0152 during European afternoon trade, the daily low; the pair subsequently consolidated at 1.0186, easing down 0.02%.

The pair was likely to find support at 1.0052, the low of November 3 and resistance at 1.0272, the high of October 13.

Risk appetite found support after Italian borrowing costs eased off earlier euro-era highs, on speculation that Prime Minister Berlusconi was about to step down amid mounting opposition from within his own party, ahead of a parliamentary vote on public finances on Tuesday.

The reports were subsequently denied by a spokesman for Mr. Berlusconi.

Meanwhile, Greek Prime Minister George Papandreou said German counterpart Angela Merkel expressed support for his decision to step down on Sunday, allowing the creation of a national unity government intended to secure international financing and avert a potential default.

Meanwhile, the broadly stronger U.S. dollar weighed on crude oil prices, with crude oil for delivery in December dipping 0.02% to trade at USD94.25 a barrel on the New York Mercantile Exchange.

Raw materials, including oil account for about half of Canada’s export revenue.

Elsewhere, the Canadian dollar was sharply higher against the euro with EUR/CAD falling 0.50%, to hit 1.3982.

Also Monday, official data showed earlier that German industrial output fell more-than-expected in September.

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