Forex - USD/CAD close to parity in subdued trade

Published 11/12/2012, 09:32 AM
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Investing.com - The U.S. dollar was hovering close to parity against the Canadian dollar on in quiet trade Monday, as markets in Canada were partially closed for the Remembrance Day holiday.

USD/CAD hit 0.9986 during early U.S. trade, the session low; the pair subsequently consolidated at 0.9693, down 0.22%.

The pair was likely to find support at 0.9946, last Thursday’s low and resistance at 1.0032, Friday’s high and a three-month high.

Bond markets in Canada were closed on Monday, but equities markets remained open for trading.

Risk sensitive assets remained supported after Greece’s government approved a budget of spending cuts and tax increases for 2013 late Sunday, just days after the parliament narrowly approved a EUR13.5 billion austerity package required to secure the country’s next installment of financial aid.

But investors remained cautious as the eurogroup of finance ministers prepared to hold talks later in the session on whether to unlock Greece’s next tranche of aid.

Expectations that a decision would be taken on Monday were low as the ministers awaited an economic progress report from the troika.

Meanwhile, lingering concerns over the U.S. fiscal cliff continued to underpin demand for the greenback.

Markets shrugged off data showing that Japan’s economy contracted by an annualized 3.5% in the third quarter, but the data underlined concerns over a slowdown in global growth.

The report was offset by official data from China over the weekend showing that exports increased by 11.6% from a year earlier in October, while the trade surplus widened to the largest in almost four years.

The loonie, as the Canadian dollar is also known, was slightly higher against the euro, with EUR/CAD slipping 0.15% to 1.2709.

Later Monday, German Chancellor Angela Merkel was to travel to Lisbon to hold talks with Portuguese political leaders, amid public opposition to the country’s austerity cuts.



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