Forexpros – The U.S. dollar was lower against its Canadian counterpart on Monday, as markets eyed a conference call of European finance ministers on a recently agreed fiscal plan while downgrade risks in the euro zone continued to weigh.
USD/CAD hit 1.0335 during early U.S. trade, the daily low; the pair subsequently consolidated at 1.0349, sliding 0.31%.
The pair was likely to find support at 1.0297, the low of December 16 and resistance at 1.0423, the high of December 14.
European Union finance ministers were to discuss plans to provide up to EUR200 billion in loans to the International Monetary Fund, as well as changes to the EU treaty that would allow a permanent EUR500 billion bailout fund to be established.
Meanwhile, investors remained concerned over the risk of credit rating cuts continued to weigh after ratings agency Fitch lowered France’s credit outlook and put six euro zone countries on review pending possible downgrades on Friday.
Moody’s Investors Service also downgraded Belgium two notches.
The greenback rose to a three-day high against the loonie earlier, as safe haven demand increased following the announcement of North Korean leader Kim Jong il’s death, spurring fears of geopolitical instability in northeast Asia.
The loonie also found support as light, sweet crude futures for delivery in February traded at USD94.39 a barrel on the New York Mercantile Exchange, adding 0.68%.
Raw materials, including oil account for about half of Canada’s export
revenue.
Elsewhere, the loonie was higher against the euro with EUR/CAD declining 0.45%, to trade at 1.3482.
Earlier Monday, official data showed that wholesale sales in Canada rose more-than-expected in October, advancing 0.9% after a 0.5% increase the previous month.
Analysts had expected wholesale sales to rise 0.3% in October.
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