Forex - USD/CAD declines on Greece austerity plan

Published 02/13/2012, 09:38 AM
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Investing.com - The U.S. dollar was lower against its Canadian counterpart on Monday, as hopes for progress in securing a bailout deal for Greece supported demand for riskier assets after the country announced a new austerity plan.

USD/CAD hit 0.9972 during early U.S. trade, the daily low; the pair subsequently consolidated at 0.9989, shedding 0.24%.

The pair was likely to find support at 0.9943, the low of February 10 and resistance at 1.0032, the high of February 3.

Risk sentiment strengthened after Greek lawmakers approved on Sunday a set of austerity measures needed to secure a second bailout package, including cuts in private-sector wages, 15,000 public-sector job cuts and a further EUR3 billion in government-spending cuts this year alone.

However, investors remained cautious amid uncertainty over the implementation of the austerity plan and ahead of the final outcome of the debt write-off negotiations between Athens and its private creditors.

Greece must still find a further EUR325 million of spending cuts and give binding assurances the plan will be implemented before Wednesday when euro zone finance ministers meet to decide on a new EUR130 billion bailout.

Meanwhile, the loonie also found support as crude oil for delivery in March jumpd % to trade at USD a barrel on the New York Mercantile Exchange.   

Raw materials, including oil account for about half of Canada’s export revenue.

The Canadian dollar was almost unchanged against the euro with EUR/CAD edging up 0.05%, to hit 1.3223.

Later in the day, U.S. President Barack Obama was to present his annual budget, including a USD4 trillion plan to create jobs while narrowing the federal budget deficit.


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