Forex - USD/CAD higher as Greece concerns weigh

Published 03/12/2012, 09:50 AM
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Investing.com - The U.S. dollar was higher against its Canadian counterpart on Monday, as concerns over Greece’s debt crisis supported safe haven demand while lower crude oil prices weighed on the loonie.

USD/CAD hit 0.9936 during early U.S. trade, the daily high; the pair subsequently consolidated at 0.9928, adding 0.23%.

The pair was likely to find support at 0.9884, the low of March 5 and resistance at 0.9956, the high of February 29.

Markets were jittery ahead of a meeting of euro zone finance ministers later in the day, to give their final approval to a EUR130 billion bailout for Greece.

Ministers were likely to discuss Spain as well, after Prime Minister Mariano Rajoy announced earlier this month that the country would cut its public deficit to 5.8% of annual output, instead of the planned 4.4% this year.

Sentiment was also weighed after the International Swaps and Derivatives Association said on Friday that Greece’s debt swap constituted a “credit event” that would activate credit-default swaps, which designed to protect investors against losses on Greek sovereign debt.

In addition, crude oil for delivery in March tumbled 1.62% to trade at USD105.61 a barrel on the New York Mercantile Exchange.   

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

Meanwhile, the greenback remained supported after Friday’s upbeat U.S. employment data dampened expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate growth.

The Department of Labor said the U.S. economy added 227,000 jobs in February, beating expectations for a 210,000 gain. The unemployment rate held steady at a three year low of 8.3%.

The loonie was lower against the euro with EUR/CAD rising 0.21%, to hit 1.3026.

Later in the day, the U.S. was to publish government data on the federal budget balance.


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