Forexnews - The U.S. dollar trimmed gains against its Canadian counterpart on Monday, retreating from a one-year high, as risk sentiment strengthened amid speculation that the European Central Bank may soon resort to fresh easing measures.
USD/CAD retreated from 1.0386, the pair's highest since September 9, 2010 to hit 1.0319 during European afternoon trade, still up 0.34%.
The pair was likely to find support at 1.0170, the low of November 30 and resistance at 1.0386, the day's high.
Market sentiment was boosted amid speculation that the European Central Bank may cut interest rates to shore up the region's economy, after ECB policymaker Ewald Nowotny said that the possibility of rate cuts should not be ruled out.
Another central bank official indicated that the ECB could resort to new covered-bond purchases in order to boost market liquidity. The bank previously purchased EUR60 billion of covered bonds in a one-year program that expired in June last year.
The loonie fell sharply earlier as investors dumped riskier assets after weekend meetings of financial leaders from G-20 nations and the International Monetary Fund resulted in no new progress on resolving the euro zone debt crisis.
Also Monday, crude oil for delivery in October dropped 0.78% to trade at USD79.22 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
Elsewhere, the loonie was lower against the euro with EUR/CAD inching up 0.01%, to hit 1.3882.
Later in the day, a U.S. report on new home sales was to be published.
USD/CAD retreated from 1.0386, the pair's highest since September 9, 2010 to hit 1.0319 during European afternoon trade, still up 0.34%.
The pair was likely to find support at 1.0170, the low of November 30 and resistance at 1.0386, the day's high.
Market sentiment was boosted amid speculation that the European Central Bank may cut interest rates to shore up the region's economy, after ECB policymaker Ewald Nowotny said that the possibility of rate cuts should not be ruled out.
Another central bank official indicated that the ECB could resort to new covered-bond purchases in order to boost market liquidity. The bank previously purchased EUR60 billion of covered bonds in a one-year program that expired in June last year.
The loonie fell sharply earlier as investors dumped riskier assets after weekend meetings of financial leaders from G-20 nations and the International Monetary Fund resulted in no new progress on resolving the euro zone debt crisis.
Also Monday, crude oil for delivery in October dropped 0.78% to trade at USD79.22 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
Elsewhere, the loonie was lower against the euro with EUR/CAD inching up 0.01%, to hit 1.3882.
Later in the day, a U.S. report on new home sales was to be published.