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Forex - USD/CAD rises to 1-week highs but gains seen limited

Published 05/18/2015, 09:23 AM
© Reuters.  Greenback climbs against loonie in subdued trade
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Investing.com - The U.S. dollar rose to one-week highs against its Canadian counterpart on Monday, as the greenback recovered from the previous session's sharp losses although downbeat U.S. economic reports continued to weigh.

USD/CAD hit 1.2115 during early U.S. trade, the pair's highest since May 11; the pair subsequently consolidated at 1.2112, gaining 0.82%.

The pair was likely to find support at 1.1920, the low of May 14 and a four-month low and resistance at 1.2145, the high of May 11.

The greenback remained under pressure after data on Friday showed that U.S. industrial production fell for the fifth straight month in April and another report showed that U.S. consumer sentiment deteriorated to a seven month low this month.

The reports came after disappointing data on retail sales and producer inflation earlier in the week and dampened hopes for a second quarter rebound after a sharp slowdown in growth in the first three months of the year.

Markets shrugged off data on Friday showing that Canadian manufacturing sales rose 2.9% in March, exceeding expectations for a 1.2% increase. The change in manufacturing sales in February was revised to a 2.2% drop from a previously estimated 1.7% fall.

The loonie was lower against the euro, with EUR/CAD adding 0.18% to 1.3775.

Sentiment on the single currency remained vulnerable amid fresh concerns over the prospects of a Greek default.

Athens is scrambling to reach a cash-for-reform deal with its international lenders in time to avoid a cash crunch.

Over the weekend, a leaked memo from the International Monetary Fund showed that there is "no possibility" that Athens can meet a loan repayment due on June 5 without a deal to unlock outstanding bailout funds.

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