Investing.com - The Canadian dollar weakened against the greenback on Tuesday, falling amid profit taking as investors viewed the greenback as increasingly oversold and snapped up the currency after it fell on lukewarm comments from a key Federal Reserve official.
In Asian trading on Tuesday, USD/CAD hit 0.9884, up 0.14%, up from a low of 0.9865 and off a high of 0.9887.
The pair sought to test support at 0.9861, Monday's low, and resistance at 0.9945, Thursday's high.
The Canadian dollar has strengthened on the coattails of rising commodities prices, given Canada's strong oil and mining industries, among others.
Strong trade ties with the neighboring U.S. make the currency more sensitive to the economy to the south.
In the U.S., Federal Reserve Bank of New York President William Dudley said that the U.S. central bank cannot rule out monetary easing.
While the economy is improving, headwinds such as high gasoline prices, waning fiscal support programs and a weak housing market threaten recovery.
Specifically, Dudley said the Federal Reserve cannot rule out launching a third round of quantitative easing, which are asset purchases from banks that inject liquidity into the economy, weakening the dollar in the process.
The Fed has launched two rounds so far since the downturn, injecting trillions of dollars into the economy in the process.
While the Fed has no concrete plans to kick-start the economy via easing, it hasn't closed the door on it as well.
Those comments sent the greenback falling although it later regained strength.
Federal Reserve Chairman Ben Bernanke is due to speak later Tuesday, and a wait-and-see attitude bolstered the U.S. dollar, which sent its Canadian cousin dipping.
The Canadian dollar, meanwhile, was down against the euro and down against the yen, with EUR/CAD up 0.09% to 1.3077 and CAD/JPY up 0.02% at 84.46.
Later Tuesday, Fed Chairman Ben Bernanke is to speak at an event in Washington; his comments will be closely watched for possible indications on the future direction of monetary policy.
The U.S. will also release data on building permits, an key gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health.
In Asian trading on Tuesday, USD/CAD hit 0.9884, up 0.14%, up from a low of 0.9865 and off a high of 0.9887.
The pair sought to test support at 0.9861, Monday's low, and resistance at 0.9945, Thursday's high.
The Canadian dollar has strengthened on the coattails of rising commodities prices, given Canada's strong oil and mining industries, among others.
Strong trade ties with the neighboring U.S. make the currency more sensitive to the economy to the south.
In the U.S., Federal Reserve Bank of New York President William Dudley said that the U.S. central bank cannot rule out monetary easing.
While the economy is improving, headwinds such as high gasoline prices, waning fiscal support programs and a weak housing market threaten recovery.
Specifically, Dudley said the Federal Reserve cannot rule out launching a third round of quantitative easing, which are asset purchases from banks that inject liquidity into the economy, weakening the dollar in the process.
The Fed has launched two rounds so far since the downturn, injecting trillions of dollars into the economy in the process.
While the Fed has no concrete plans to kick-start the economy via easing, it hasn't closed the door on it as well.
Those comments sent the greenback falling although it later regained strength.
Federal Reserve Chairman Ben Bernanke is due to speak later Tuesday, and a wait-and-see attitude bolstered the U.S. dollar, which sent its Canadian cousin dipping.
The Canadian dollar, meanwhile, was down against the euro and down against the yen, with EUR/CAD up 0.09% to 1.3077 and CAD/JPY up 0.02% at 84.46.
Later Tuesday, Fed Chairman Ben Bernanke is to speak at an event in Washington; his comments will be closely watched for possible indications on the future direction of monetary policy.
The U.S. will also release data on building permits, an key gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health.