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Forex - USD/CAD up as oil prices dip after China tightens policy

Published 04/18/2011, 05:32 AM
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Investing.com – The Canadian dollar was lower against its U.S. counterpart on Monday as crude oil, Canada’s largest export, declined after China's decision to increase banking reserve requirements and after comments by a Saudi Arabian minister on global oil supplies.

USD/CAD hit 0.9641 during European morning trade, the daily high; the pair subsequently consolidated at 0.9615, gaining 0.22%.

The pair was likely to find support at 0.9555, the low of April 12 and resistance at 0.9669, the high of April 14 and a seven-day high.

On the New York Mercantile Exchange, crude oil for delivery in June was down 0.65% to trade at USD109.35 a barrel, after peaking at USD109.89 earlier in the day.

On Sunday the People’s Bank of China said it would raise the reserve requirement ratio for banks by 0.5%, the bank’s fourth such increase this year.

The move came after economic data released Friday which showed China's consumer price index rose 5.4% in March, the fastest since July 2008.

Also Sunday, Saudi Oil Minister Ali al-Naimi said the global crude market was oversupplied, with Saudi Arabian output likely to be higher in April compared with March.

Meanwhile, the loonie was higher against the euro, with EUR/CAD shedding 0.55% to hit 1.3764.

Later in the day, Canada was to release government data on foreign securities purchases, while in the U.S. Federal Reserve Bank of Dallas President Richard Fisher was due to speak at two events in Atlanta.


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