Investing.com - The U.S. dollar dropped against its Canadian counterpart on Tuesday, but remained within close distance of a nearly 13-year peak as plummeting oil prices continued to dampen demand for the Canadian currency.
USD/CAD hit 1.4432 during early U.S. trade, the pair’s lowest since January 15; the pair subsequently consolidated at 1.4493, declining 0.47%.
The pair was likely to find support at 1.4338, the low of January 15 and resistance at 1.4653, Monday’s high and a nearly 13-year high.
Sentiment on the commodity-related Canadian dollar remained vulnerable after oil prices fell below $28 per barrel on Monday, the lowest level in 12 years.
The renewed fall in oil prices came as Iranian exports were set to resume after Western sanctions were lifted, fueling fears over increased supplies amid a global supply glut and slowing demand.
In Canada, data showed that foreign securities purchases increased by C$2.58 billion in November, compared to expectations for a gain of C$12.10 billion.
Foreign securities purchases rose by C$19.08 billion in October, whose figure was revised from a previously estimated C$22.08 billion gain.
Investors also continued to focus on China after official figures on Tuesday showed that the annual rate of growth slowed to 6.8% in the three months to December from 6.9% in the previous quarter, matching forecasts.
Full-year growth was 6.9%, slightly below the government’s target of 7% and the slowest rate of growth in a quarter century.
Overall the data indicated that the world’s second-largest economy is continuing to lose momentum, after falls in the nation’s currency earlier this year fueled fears over a China-led slowdown in global growth.
Also Tuesday, the International Monetary Fund cut its global growth forecast to 3.4% for this year and 3.6% in 2017.
The loonie was higher against the euro, with EUR/CAD retreating 0.62% to 1.5759.
In the euro zone, the ZEW Centre for Economic Research said that its index of German economic sentiment declined by 5.9 points to 10.2 this month from December’s reading of 16.1. Analysts had expected the index to fall by 7.9 points to 8.2 in January.
A separate report confirmed that the annual rate of inflation in the euro area came in at 0.2% in December, in line with forecasts. On a month-over-month basis consumer prices were flat.