Forexpros – The U.S. dollar held gains against its Canadian counterpart on Tuesday, despite better-then-expected Canadian manufacturing data as fears over the deepening debt crisis in the euro zone boosted safe haven demand.
USD/CAD hit 1.0263 during early U.S. trade, the pair’s highest since November 10; the pair subsequently consolidated at 1.0217, rising 0.47%.
The pair was likely to find support at 1.0078, the low of November 14 and resistance at 1.0327, the high of October 12.
Official data showed that Canada’s manufacturing sales rose more-than-expected in September, advancing 2.6% after a 1.4% rise the previous month.
Analysts had expected manufacturing sales to increase 1.1% in September.
But the Canadian dollar came under pressure as market sentiment was hit after Italy’s 10-year bond yields rose to near unsustainable levels, climbing above 7% earlier, while the yield on Spanish 10-year bonds rose above 6% for the first time since August.
In the U.S., the Commerce Department said retail sales rose more-than-expected in October, increasing 0.5%, while core retail sales also beat expectations, climbing 0.6%.
Analysts had expected retail sales to rise 0.3% in October.
The report also showed that core retail sales rose more-than-expected, climbing by 0.6%, above expectations for a 0.2% gain.
September’s figure was revised down to a 0.5% gain from a previously reported 0.6% increase.
A separate report showed that producer price inflation in the U.S. eased more-than-expected in October, declining 0.3% compared to expectations for a 0.2% drop.
Elsewhere, the loonie was up against the euro with EUR/CAD slipping 0.09%, to hit 1.3851.
Also Tuesday, the Federal Reserve Bank of New York said that its general business conditions index improved by 9.1 points to 0.6 in November from minus 8.5 in October.
Analysts had expected the index to improve to minus 2.0 in November.
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