Forexpros – The U.S. dollar extended gains against its Canadian counterpart on Wednesday, as increasing uncertainty over the outcome of this week’s critical European Union summit supported safe haven demand.
USD/CAD hit 1.0128 during early U.S. trade, the daily high; the pair subsequently consolidated at 1.0125 gaining 0.25%.
The pair was likely to find support at 1.0065, the session low and five-week low and resistance at 1.0206, Tuesday’s high.
Market sentiment was dented after the Wall Street Journal reported that an unnamed senior German official expressed pessimism on the prospect of success at the two-day EU summit, scheduled to begin Thursday.
European leaders are to discuss proposed changes to EU treaties which would allow for greater fiscal integration in the single currency bloc, as well as an enlargement of the bloc’s bailout fund, the European Financial Stability Facility and the permanent structure that will replace it, the European Stability Mechanism.
Trade was likely to continue in a narrow range throughout the session with no data releases from the U.S. or Canada on the calendar.
Meanwhile, the Canadian dollar was slightly higher against the euro, with EUR/CAD dipping 0.07% to hit 1.3424.
Earlier Wednesday, U.S. Treasury Secretary Timothy Geithner said the International Monetary Fund has a key role to play in resolving the euro zone’s debt crisis, but dismissed speculation that the Federal Reserve would lend money to the institution.
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