Investing.com - The U.S. dollar edged higher against the Canadian dollar on Monday, in spite of crude oil prices being close to nine-month highs, as concerns over the conflict in Iraq underpinned safe haven demand for the greenback.
USD/CAD edged up 0.12% to 1.0869 from 1.0853 late Friday.
The pair was likely to find support at 1.0821, the low of May 30 and resistance at 1.0905, Wednesday’s high.
Crude oil prices touched session highs of $106.78 on Monday, as concerns over the ongoing Sunni insurgency in Iraq fuelled fears over the impact of reduced output from one of the world's largest oil producers.
While higher oil prices normally boost the commodity-linked Canadian dollar, the flight to safety arising from the conflict and concerns over the impact on global economic growth offset that.
In the U.S., data on Monday showed that manufacturing activity in the Empire State expanded more quickly than forecast in June.
The Federal Reserve Bank of New York said that its general business conditions index increased to 19.28 this month from a reading of 19.01 in May. Analysts had expected the index to decline to 15.0.
The report indicated that labor market conditions continued to improve, with indexes pointing to a modest increase in employment levels and hours worked.
A separate report showed that foreign investors’ acquisitions of Canadian securities increased in April.
Foreign investment totalled C$10.13 billion in April, above expectations for purchases of C$4.27 billion. Foreign investors sold C$1.41 billion worth of Canadian securities in March.
At the same time, Canadian investment in foreign securities slowed to C$2.5 billion.
Elsewhere Monday, the euro pushed higher against the Canadian dollar, with EUR/CAD rising 0.26% to 1.4736, recovering from the six month trough of 1.4669 set last Thursday.
The euro has weakened broadly since the European Central Bank eased monetary policy earlier this month, in a bid to tackle persistently low levels on inflation in the euro area.
Data released on Monday confirmed that the annual rate of inflation in the euro zone remained unchanged at a four-and-a-half year low of 0.5% in May.