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Forex - USD/CAD higher as Greece talks dominate

Published 01/24/2012, 09:42 AM
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Investing.com - The U.S. dollar was higher against its Canadian counterpart on Tuesday, as growing uncertainty over talks to reach a deal on the restructuring of Greece’s sovereign debt weighed on demand for riskier assets.

USD/CAD hit 1.0142 during early U.S. trade, the daily high; the pair subsequently consolidated at 1.0136, adding 0.48%.

The pair was likely to find support at 1.0051, the low of January 23 and resistance at 1.0187, the high of January 17.

On Monday, European Union finance ministers rejected demands by Greece’s creditors that new bonds to be issued in exchange for their existing Greek holdings will carry an interest rate of 4%, prolonging negotiations on the issue.

Sentiment found support earlier after preliminary data showed that manufacturing activity in the single currency bloc rose at the fastest pace since August this month.

But a separate report showed that industrial new orders in the euro zone declined in November, albeit at a slower pace than expected.

Meanwhile, the loonie also came under pressure as crude oil for delivery in March tumbled 1.06% to trade at USD98.61 a barrel on the New York Mercantile Exchange.   

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

Elsewhere, the Canadian dollar was higher against the euro with EUR/CAD advancing 0.07%, to hit 1.3135.

The Canadian dollar shrugged off data showing that core retail sales rose more-than-expected in November, ticking up 0.3% after a 0.6% rise the previous month. Analysts had expected core retail sales to rise 0.2% in November.

The report also showed that retail sales rose 0.3% in November, in line with expectations.


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