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Forex - USD/CAD slips to 7-week low as energy takeovers cleared

Published 12/10/2012, 09:41 AM
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Investing.com - The U.S. dollar slipped to a seven-week low against the Canadian dollar on Monday, after the Canadian government cleared the way for takeover deals on two domestic energy companies.

USD/CAD hit 0.9866 during early U.S. trade, the pair’s lowest since October 19; the pair subsequently consolidated at 0.9877, dipping 0.08%.

The pair was likely to find near-term support at 0.9843, the low of October 19 and resistance at 0.9932, Friday’s high.

On Friday, Canada’s government approved the acquisition of Nexen by the state run China National Offshore Oil Corporation.

The government also gave the green light to the acquisition of Progress Energy Resources of Canada by Petronas, the Malaysian state-owned oil and gas company.

The greenback remained supported after Friday’s stronger-than-forecast U.S. jobs data, but expectations that the Federal Reserve will continue to pursue monetary easing at this week’s policy setting meeting remained intact.

Market participants also remained cautious as talks aimed at avoiding the U.S. fiscal cliff continued in Washington, amid concerns that the automatic tax hikes and spending cuts due to take effect in the New Year could derail the U.S. recovery.

The loonie, as the Canadian dollar is also known, was almost unchanged against the euro, with EUR/CAD dipping 0.04% to 1.2773.

The euro remained under pressure amid fears that a change in political leadership in Italy will hamper the country’s efforts to emerge from the debt crisis in the euro zone.

On Saturday, Italian Prime Minister Mario Monti announced that he will resign as soon as he has passed the 2013 budget, after members of former Prime Minister Silvio Berlusconi’s party withdrew their support for the government.



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