Investing.com - The U.S. dollar fell to a three-and-a-half-month low against the Canadian dollar on Tuesday, as risk appetite was supported by speculation that the European Central Bank will soon take strong steps to stem the debt crisis in the euro zone.
USD/CAD hit 0.9852 during early U.S. trade, the pair’s lowest since May 3; the pair subsequently consolidated at 0.9858, shedding 0.25%.
The pair was likely to find support at 0.9827, the low of May 3 and resistance at 0.9887, the session high.
Risk appetite sharpened after a report in the U.K.’s Telegraph newspaper said it could confirm weekend reports that the ECB may set a cap on peripheral euro zone bond yields at its next policy meeting in September, beyond which its bond buying program would kick in.
On Monday, the ECB dismissed the reports, saying it was “misleading” to report on decisions which have not yet been taken.
The Canadian dollar shrugged off data showing that Canadian wholesale sales declined unexpectedly in June, falling for the first time in five months.
Statistics Canada said wholesale sales fell by 0.1% in June, confounding expectations for a 0.4% increase, following a 0.9% increase in May.
Canadian wholesale sales totaled CAD49.9 billion in June.
The Canadian dollar was also supported after crude oil prices rallied to fresh three month highs.
Crude futures for delivery in September were trading at USD97.59 a barrel on the New York Mercantile Exchange, up 1.38%.
Raw materials, including oil account for about half of Canada’s export revenue.
The loonie, as the Canadian dollar is also known, was down against the euro, with EUR/CAD advancing 0.64% to 1.2278.
Market participants were looking ahead to data on Canadian retail sales on Wednesday, as well as a speech by Bank of Canada Governor Mark Carney, and the minutes of the Federal Reserve’s August policy meeting.
USD/CAD hit 0.9852 during early U.S. trade, the pair’s lowest since May 3; the pair subsequently consolidated at 0.9858, shedding 0.25%.
The pair was likely to find support at 0.9827, the low of May 3 and resistance at 0.9887, the session high.
Risk appetite sharpened after a report in the U.K.’s Telegraph newspaper said it could confirm weekend reports that the ECB may set a cap on peripheral euro zone bond yields at its next policy meeting in September, beyond which its bond buying program would kick in.
On Monday, the ECB dismissed the reports, saying it was “misleading” to report on decisions which have not yet been taken.
The Canadian dollar shrugged off data showing that Canadian wholesale sales declined unexpectedly in June, falling for the first time in five months.
Statistics Canada said wholesale sales fell by 0.1% in June, confounding expectations for a 0.4% increase, following a 0.9% increase in May.
Canadian wholesale sales totaled CAD49.9 billion in June.
The Canadian dollar was also supported after crude oil prices rallied to fresh three month highs.
Crude futures for delivery in September were trading at USD97.59 a barrel on the New York Mercantile Exchange, up 1.38%.
Raw materials, including oil account for about half of Canada’s export revenue.
The loonie, as the Canadian dollar is also known, was down against the euro, with EUR/CAD advancing 0.64% to 1.2278.
Market participants were looking ahead to data on Canadian retail sales on Wednesday, as well as a speech by Bank of Canada Governor Mark Carney, and the minutes of the Federal Reserve’s August policy meeting.