Forex - USD/CAD hits 4-day high amid euro zone worries

Published 04/23/2012, 09:40 AM
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Investing.com - The U.S. dollar advanced to a four-day high against its Canadian counterpart on Monday, as renewed concerns over the political and economic outlook in the euro zone dampened demand for higher yielding assets.

USD/CAD hit 0.9979 during early U.S. trade, the pair’s highest since April 17; the pair subsequently consolidated at 0.9962, gaining 0.41%.

The pair was likely to find support at 0.9915, the session low and resistance at 1.0010, the high of April 17.

Earlier Monday, data showed that the euro zone's manufacturing output slumped to its lowest level since June 2009 this month, while its services sector fell to a five month low.

The decline was driven by poor performances in Germany and France, with manufacturing activity in Germany slowing to the lowest level in almost three years.

Meanwhile, investors remained wary as by as they mulled the implications of the collapse of the Dutch government following failed budget negotiations and outcome of the first round of the French presidential election.

The Canadian dollar also came under pressure from sharply lower oil prices, as crude oil contracts for delivery in June tumbled 1.47% on the New York Mercantile Exchange to trade at USD102.36 a barrel.

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

The loonie, as the Canadian dollar is also known, was slightly higher against the euro, with EUR/CAD slipping 0.14% to hit 1.3094.

Also Monday, official data showed that Canadian wholesale sales rose unexpectedly in February, rebounding from the previous month’s steep decline.

Statistics Canada said wholesale sales rose by 1.6% in February, confounding expectations for a 1.0% decline.

January's figure was revised to a drop of 1.1% from a previously reported decline of 1.0%.


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