Investing.com - The U.S. dollar pared losses against its Canadian counterpart on Tuesday, despite the release of downbeat U.S. manufacturing activity data as demand for the Canadian currency weakened after hopes for a reduction in global oil production were crushed.
USD/CAD eased off 1.3707, the pair’s lowest since February 5, to hit 1.3822 during early U.S. trade, still down 0.12%.
The pair was likely to find support at 1.3634, the low of February 4 and a two-month low and resistance at 1.3967, Friday’s high.
The Federal Reserve Bank of New York said that its general business conditions index improved to -16.7 this month from a reading of -19.4 in January. Analysts had expected the index to rise to -10.0 in February.
But the Canadian dollar weakened after a meeting between oil ministers from Saudi Arabia, Russia, Qatar and Venezuela ended with consensus to freeze output, but not to cut production.
Oil prices had soared nearly 6% earlier Tuesday following news that oil ministers from top producers Saudi Arabia and Russia were to meet in Qatar, fueling speculation of a coordinated cut in crude output.
The loonie was lower against the euro, with EUR/CAD edging up 0.08% to 1.5448.
The euro found support after European Central Bank President Mario Draghi said on Monday that the central bank would not hesitate to act to boost euro zone growth and inflation, hinting at the possibility of further easing measures.
Meanwhile, data on Tuesday showed that German economic sentiment fell sharply this month, amid concerns over falling oil prices, slowing global growth and heightened market volatility.
The ZEW index of German economic sentiment fell to 1 this month from 10.2 in January, but was still slightly better than economists’ forecasts for a reading of zero.