Investing.com - The U.S. dollar was trading at 12-year highs against its Canadian counterpart on Wednesday, as concerns over global geopolitical tensions weighed on risk sentiment and positive U.S. data supported demand for the greenback.
USD/CAD hit 1.4109 during early U.S. trade, the pair’s highest since August 2003; the pair subsequently consolidated at 1.4083, climbing 0.64%.
The pair was likely to find support at 1.3892, Tuesday’s low and resistance at 1.4170.
Market sentiment was hit after North Korea confirmed on Wednesday that it had conducted a nuclear test and said that it won't give up nuclear capability unless U.S. abandons its hostile foreign policy towards the country.
Investors also remained cautious amid growing tensions between Iran and Saudi Arabia, following the execution of a prominent Saudi Shia cleric.
Meanwhile, the greenback remained supported after payroll processing firm ADP reported that non-farm private employment rose by 257,000 last month, easily surpassing expectations for an increase of 192,000.
The U.S. economy created 211,000 jobs in November, whose figure was downwardly revised from a previously reported increase of 217,000.
A separate report showed that the U.S. trade deficit narrowed to $42.37 billion in November from $44.58 billion in October, whose figure was revised from a previously reported deficit of $43.9 billion.
Analysts had expected the U.S. trade deficit to narrow to $44.0 billion in November.
In Canada, data showed that the trade deficit narrowed to C$1.99 billion in November from C$2.49 billion in October, whose figure was revised from a previously estimated deficit of C$2.76 billion.
Analysts had expected the trade deficit to widen to C$2.60 billion in November.
The loonie was lower against the euro, with EUR/CAD gaining 0.57% to 1.5124.