Forex - USD/CAD erases losses after weak Canadian economic data

Published 09/20/2010, 08:56 AM
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Investing.com – The U.S. dollar erased early losses against its Canadian counterpart on Monday, after a flurry of worse-than-expected Canadian economic data, but gains were limited as markets eyed U.S. housing data.

USD/CAD retreated from 1.0292, the daily low, to hit 1.0336 during European afternoon trade, gaining 0.06%.

The pair was likely to find support at 1.0215, last Friday's low and resistance at 1.0373, the high of September 10.

Earlier Monday, Statistics Canada said that foreign investment in Canada rose less-than-expected in July, rising to CAD 5.48 billion, after rising to CAD 5.39 in June.

Analysts had expected foreign investment to rise to CAD 8.11 billion in July.

The report said that non-Canadian residents added CAD 5.5 billion to their portfolios in July, with Canadian bonds accounting for the majority of foreign inflows.

Meanwhile, a separate report showed that Canadian wholesale sales fell unexpectedly in July, dropping 0.1% after declining by 0.3% in June.

Analysts had expected wholesale sales to rise by 0.4% in July.

The report said that wholesale sales declined to CAD 43.9 billion in July, with the largest decrease recorded in the motor vehicle industry, which fell by 3.8%. It was the first drop in motor vehicle sales in 3 months.

Meanwhile, the loonie was up against the euro, with EUR/CAD shedding 0.03% to hit 1.3473.

Later in the day, the U.S. was to publish industry data on home sales.

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