Investing.com - The U.S. dollar dropped against its Canadian counterpart on Tuesday, as a renewed selloff in European government bond and stock markets weighed on demand for the greenback.
USD/CAD hit 1.2026 during early U.S. trade, the pair's lowest since May 6; the pair subsequently consolidated at 1.2052, declining 0.42%.
The pair was likely to find support at 1.1937, the low of May 6 and resistance at 1.2165, the high of May 7.
A fresh selloff in global bond markets undermined greenback strength. German 10-year bund yields jumped, narrowing the gap with their U.S. counterparts.
German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.
The euro was higher against the dollar, with EUR/USD up 0.67% to 1.1230.
Earlier Tuesday, Greece repaid a €770 million loan installment to the International Monetary Fund, easing concerns that it was on the verge of default although fears over the country’s future in the euro area persisted.
Athens is scrambling to reach an agreement with its international creditors on a package of economic reforms in order to access fresh bailout funds and avert a liquidity crunch.
The loonie was lower against the euro, with EUR/CAD edging up 0.27% to 1.3535.