Investing.com – The U.S. dollar was sharply lower against its Canadian counterpart on Monday, as the outlook for higher-yielding assets was boosted by fresh hopes for a deal to stem the debt crisis in the euro zone.
USD/CAD hit 1.0305 during early U.S. trade, the pair’s lowest since November 21; the pair subsequently consolidated at 1.0309, tumbling 1.53%.
The pair was likely to find support at 1.0198, the low of November 18 and resistance at 1.0448, the days high.
Risk appetite was bolstered by reports that European Union leaders may be able to reach an agreement on a deal to halt the spread of the region’s debt crisis, which would make budget discipline enforceable by European authorities and would give the European Central Bank more scope to undertake large scale bond purchases.
Earlier Monday, Belgium paid record yields at an auction of government debt but sold the maximum targeted amount of EUR2 billion of bonds in the country’s first debt sale since Standard & Poor's downgraded the country’s rating by one notch on Friday.
The Canadian dollar was also supported by stronger crude oil prices, with the January crude contract on the New York Mercantile Exchange jumping 2.61% to trade at a seven-day high of USD99.28 a barrel.
Raw materials, including oil account for about half of Canada’s export revenue.
The Canadian dollar was also higher against the euro, with EUR/CAD shedding 0.44% to hit 1.3803.
Later in the day, the U.S. was to release official data on new home sales.
USD/CAD hit 1.0305 during early U.S. trade, the pair’s lowest since November 21; the pair subsequently consolidated at 1.0309, tumbling 1.53%.
The pair was likely to find support at 1.0198, the low of November 18 and resistance at 1.0448, the days high.
Risk appetite was bolstered by reports that European Union leaders may be able to reach an agreement on a deal to halt the spread of the region’s debt crisis, which would make budget discipline enforceable by European authorities and would give the European Central Bank more scope to undertake large scale bond purchases.
Earlier Monday, Belgium paid record yields at an auction of government debt but sold the maximum targeted amount of EUR2 billion of bonds in the country’s first debt sale since Standard & Poor's downgraded the country’s rating by one notch on Friday.
The Canadian dollar was also supported by stronger crude oil prices, with the January crude contract on the New York Mercantile Exchange jumping 2.61% to trade at a seven-day high of USD99.28 a barrel.
Raw materials, including oil account for about half of Canada’s export revenue.
The Canadian dollar was also higher against the euro, with EUR/CAD shedding 0.44% to hit 1.3803.
Later in the day, the U.S. was to release official data on new home sales.