Forexpros – The U.S. dollar advanced to an eight-day high against its Canadian counterpart on Tuesday, as fresh concerns over a possible slowdown in Chinese growth saw investors shun riskier assets in favor of the safety of the greenback.
USD/CAD hit 0.9969 during U.S. morning trade, the pair’s highest since March 8; the pair subsequently consolidated at 0.9945, advancing 0.77%.
The pair was likely to find support at 0.9866, the session low and resistance at 0.9989, the high of March 8.
Sentiment on the growth linked Canadian dollar was hit earlier amid renewed concerns over a slowdown in the world’s second largest economy, after global miner BHP Billiton said that Chinese demand for iron ore is slackening, sparking concerns that commodity prices may decline.
The Canadian dollar also came under pressure as crude oil prices declined sharply, with crude oil contracts for delivery in May slumping 1.63% on the New York Mercantile Exchange to trade at USD106.78 a barrel.
Raw materials, including oil account for about half of Canada’s export revenue.
In the U.S., official data showed that housing starts fell in February, but the number of building permits issued rose to the highest level since October 2008.
The Commerce Department said housing starts declined 1.1% last month to a seasonally adjusted 0.70 million from a revised 0.71 million units in January. Economists had forecast housing starts little changed at a 0.70 million-unit rate.
Building permits jumped 5.1% to a seasonally adjusted 0.72 million, above expectations for a modest 0.6% gain to 0.69 million.
The loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD surging 0.75% to hit 1.3163.
Later in the day, Federal Reserve Chairman Ben Bernanke was to speak at an event in Washington; his comments would be closely watched.
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