Investing.com - The U.S. dollar rose against its Canadian counterpart on Tuesday, as concerns over ongoing tensions in Ukraine continued to weigh on market sentiment and investors eyed the release of a number of U.S. economic reports to be released throughout the week.
USD/CAD hit 1.0920 during early U.S. trade, the pair's highest since August 27; the pair subsequently consolidated at 1.0905, rising 0.31%.
The pair was likely to find support at 1.0856, Monday's low and resistance at 1.0953, the high of August 27.
Markets were jittery after European Union leaders threatened over the weekend to impose a new round of sanctions on Russia if Moscow does not scale back its involvement in the conflict in eastern Ukraine.
The dollar also received a boost by weakness in the euro and gains in Asian equities markets overnight, which curbed investor demand for the safe haven yen.
Investors were looking ahead to the latest U.S. employment report due for release on Friday, for further indications on the strength of the recovery in the labor market, a key factor in deciding the future path of monetary policy.
The Canadian dollar had recently strengthened against the greenback after official data on Friday showed that Canada’s economy grew at a faster-than-expected rate in the second quarter.
The loonie was lower against the euro, with EUR/CAD gaining 0.31% to 1.4316.
Sentiment on the euro remained vulnerable however, amid mounting speculation that the ECB will implement fresh measures as a way to shore up long term inflation expectations after data showed that the annual rate of euro zone inflation slowed to a five year low in August.
Meanwhile, concerns that sanctions against Russia would act as a drag on growth in the euro area mounted after data on Monday showed that manufacturing activity in the bloc slowed last month.