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Forex - USD/CAD slips amid Greece hopes

Published 12/03/2012, 09:30 AM
Updated 12/03/2012, 09:31 AM
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Investing.com - The U.S. dollar slipped against its Canadian counterpart on Monday, as market sentiment strengthened after Greece announced the details of a debt buyback scheme, while higher oil prices lent support to the commodity-linked loonie.

USD/CAD hit 0.9915 during early U.S. trade, the pair's lowest since November 27; the pair subsequently consolidated 0.9929, slipping 0.13%.

The pair was likely to find support at 0.9875, the low of November 7 and resistance at 0.9982, the high of November 23.

Market sentiment strengthened after Greece launched a scheme to buy back its debt from private investors, as part of an agreement to unlock a new bailout package worth EUR44 billion.

Euro zone finance ministers were to hold talks in Brussels later in the day to discuss the terms of the new Greek aid deal, after Germany’s parliament gave it the green light on Friday. The ministers were also to discuss details of a EUR10 billion bailout for Cyprus.

Investor confidence was also boosted after final data earlier showed that China’s HSBC purchasing managers’ index came in at 50.5 in November from 49.5 in October, indicating that economic activity is picking up.

Meanwhile, light sweet crude futures for delivery in January traded at USD89.62 a barrel on the New York Mercantile Exchange, jumping 1.42%.

Raw materials, including oil account for about half of Canada’s export revenue.

The loonie was lower against the euro with EUR/CAD adding 0.24%, to hit 1.2943.

Also Monday, data showed that the final euro zone manufacturing purchasing managers’ index remained unchanged at 46.2 in November, the highest level since March, but remaining in contraction territory for the 16th consecutive month.

Later in the day, the Institute of Supply Management was to produce a report on manufacturing growth in the U.S.


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