Investing.com - The U.S. dollar trimmed losses against its Canadian counterpart on Tuesday, after the Bank of Canada said the outlook for the global economy had “deteriorated” after it left its benchmark interest rate unchanged at 1% earlier.
USD/CAD pulled back from 1.0112, the pair’s lowest since January 4, to hit 1.0145 during early U.S. trade, still down 0.32% on the day.
The pair was likely to find support at 1.0102, the low of January 4 and resistance at 1.0187, the day’s high.
In its rate statement, the BoC said the uncertainty over the global economic outlook had increased since its October monetary policy report, adding that the recession in Europe was expected to be “deeper and longer" than earlier forecast.
The central bank also said the U.S. economy would grow "at a more modest pace going forward," amid fallout from the debt crisis in the euro zone.
The greenback fell to an almost two-week low against the Canadian dollar earlier as risk appetite was boosted after stronger-than-expected German and Chinese economic data, but market sentiment remained fragile as the threat of a default by Greece kept investors in check.
The Canadian dollar remained supported by higher crude oil prices, with crude oil for delivery in March jumping 2.06% to trade at USD100.32 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
The Canadian dollar was fractionally lower against the euro, with EUR/CAD inching up 0.07% to hit 1.2905.
Also Tuesday, an index of manufacturing conditions in New York improved more-than-expected in January, climbing to the highest level since April.
The Federal Reserve Bank of New York said that its general business conditions index improved by 4.0 points to 13.5 in January from 9.5 in December.
Analysts had expected the index to improve by 1.0 point to 10.5 in January.
USD/CAD pulled back from 1.0112, the pair’s lowest since January 4, to hit 1.0145 during early U.S. trade, still down 0.32% on the day.
The pair was likely to find support at 1.0102, the low of January 4 and resistance at 1.0187, the day’s high.
In its rate statement, the BoC said the uncertainty over the global economic outlook had increased since its October monetary policy report, adding that the recession in Europe was expected to be “deeper and longer" than earlier forecast.
The central bank also said the U.S. economy would grow "at a more modest pace going forward," amid fallout from the debt crisis in the euro zone.
The greenback fell to an almost two-week low against the Canadian dollar earlier as risk appetite was boosted after stronger-than-expected German and Chinese economic data, but market sentiment remained fragile as the threat of a default by Greece kept investors in check.
The Canadian dollar remained supported by higher crude oil prices, with crude oil for delivery in March jumping 2.06% to trade at USD100.32 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
The Canadian dollar was fractionally lower against the euro, with EUR/CAD inching up 0.07% to hit 1.2905.
Also Tuesday, an index of manufacturing conditions in New York improved more-than-expected in January, climbing to the highest level since April.
The Federal Reserve Bank of New York said that its general business conditions index improved by 4.0 points to 13.5 in January from 9.5 in December.
Analysts had expected the index to improve by 1.0 point to 10.5 in January.