Forexpros – The U.S. dollar advanced to a session high against its Canadian counterpart on Monday, after an unexpected decline in Canadian economic growth in February and soft U.S. consumer spending data boosted safe haven demand.

USD/CAD hit 0.9864 during early U.S. trade, the session high; the pair subsequently consolidated at 0.9857, gaining 0.54%.

The pair was likely to find support at 0.9799, Friday’s low and a multi-month low and resistance at 0.9927, the high of April 4.

Official data showed that Canadian gross domestic product contracted by a seasonally adjusted 0.2% in February, defying expectations for growth of 0.2%, led lower by temporary shutdowns in oil and mining production.

Canada’s economy expanded at an annualized rate of 1.6%, disappointing expectations for a 2.1% increase, following growth of 1.7% in January.

In the U.S., a government report said that consumer spending rose by 0.3% in March, slowing from 0.9% the previous month, while incomes rose a better-than-expected 0.4%.

Market sentiment was hit by fresh concerns over the crisis in the euro zone earlier, after official data confirmed that Spain’s economy entered a recession in the first quarter.

The Canadian dollar also came under pressure from lower oil prices, with crude futures for delivery in June down 0.63% on the New York Mercantile Exchange to trade at USD104.27 a barrel.

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

The loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD adding 0.34% to hit 1.3038.

Later Monday, the U.S. was to release a report on business activity in Chicago.

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