Forexpros – The U.S. dollar climbed back above parity against its Canadian counterpart for the first time in six sessions on Tuesday, as demand for riskier assets was hit by growing concerns over whether Greece will be able to complete a debt swap deal.
USD/CAD hit 1.0025 during early U.S. trade, the pair’s highest since February 27; the pair subsequently consolidated at 1.0014, advancing 0.69%.
The pair was likely to find support at 0.9935, the session low and resistance at 1.0048, the high of February 27.
Concerns over the risk of a default by Greece mounted ahead of the March 8 deadline for the country’s private creditors to sign on to a EUR106 billion debt swap deal, a requirement for Athens to tap a recently approved EUR130 billion bailout fund.
Earlier in the day, Greek finance minister Evangelos Venizelos strongly urged private sector creditors to take part in the debt swap deal and warned that it was the best offer they would receive.
Meanwhile, worries over the outlook for the global economy lingered after China cut its 2012 growth target to 7.5% and after data confirmed that the euro zone economy contracted in the fourth quarter.
The Canadian dollar also came under pressure as oil prices declined sharply, with crude oil contracts for delivery in April tumbling 1.75% on the New York Mercantile Exchange, to trade at USD104.86 a barrel.
Raw materials, including oil account for about half of Canada’s export revenue.
The loonie, as the Canadian dollar is sometimes known, was fractionally lower against the euro, with EUR/CAD inching up 0.02% to hit 1.3119.
Later in the day, Canada was to release the Ivey Purchasing Managers Index.
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