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Forex - USD/CAD falls to 6-week lows

Published 04/02/2013, 09:41 AM
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Investing.com - The U.S. dollar was trading close to six-week lows against the Canadian dollar on Tuesday, after data on Monday showed that the U.S. manufacturing sector expanded more slowly than forecast last month.

USD/CAD hit 1.0126 during early U.S. trade, the pair’s lowest since February 20; the pair subsequently consolidated at 1.0139, shedding 0.26%.

The pair was likely to find support at 1.0100, the low of February 19 and resistance at 1.0167, the session high.

The Institute of Supply Management said its U.S. manufacturing purchasing managers’ index declined to 51.3 in March, its lowest level since December, from 54.2 in February.

Analysts had expected the manufacturing PMI to remain unchanged last month.

Elsewhere, data on Monday showed that China’s manufacturing PMI rose to 50.9 in March from 50.1 in February, which was the lowest reading in five months, adding to optimism over a recovery in the world’s second largest economy.

The loonie, as the Canadian dollar is also known, was higher against the euro, with EUR/CAD down 0.51% to 1.2996.

 In the euro zone, a string of weak data fuelled doubts over the strength of the region’s recovery in the first quarter, while concerns over the potential implications of a bailout for Cyprus also weighed.

Official data showed that the euro zone unemployment rate rose to an all-time high of 12% in February compared with an original estimate of 11.9% for January, which was revised up to 12%.

A separate report showed that the euro zone’s manufacturing PMI ticked up to 46.8 in March, from a final reading of 46.6 the previous month, still substantially below the 50 mark that separates growth from contraction.

The U.S. was to release a government report on factory orders later in the trading day.



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