Forex - USD/CAD lower amid EU optimism, crude oil gains

Published 01/23/2012, 09:34 AM
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Investing.com - The U.S. dollar was lower against its Canadian counterpart on Monday, as sentiment improved ahead of a highly anticipated meeting of European finance ministers, while higher crude oil prices supported demand for the loonie.

USD/CAD hit 1.0080 during European afternoon trade, the pair’s lowest since January 19; the pair subsequently consolidated at 1.0081, shedding 0.50%.

The pair was likely to find support at 1.0035, the low of October 26 and resistance at 1.0177, the high of January 18.

European Union finance ministers were to discuss the terms of a proposed debt restructuring package for Greece, as well as the terms of a fiscal compact that was agreed upon in December.

The restructuring agreement is a precondition for Athens to receive its next tranche of bailout funds in order to avoid a default when an EUR14.4 billion bond redemption comes due on March 20.

On Sunday, Greece’s creditors said they had reached their maximum offer for a voluntary debt swop and said it was now up to the EU and the International Monetary Fund to agree on whether they can accept the deal.

Meanwhile, the loonie also found support as crude oil for delivery in March jumped 0.98% to trade at USD99.30 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 lower against the euro with EUR/CAD advancing 0.12%, to hit 1.3119.

Also Monday, Statistics Canada said in a report that its leading index rose more-than-expected in December, ticking up 0.8% after a 0.9% increase the previous month.

Analysts had expected the leading index to rise 0.6% in December.


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