Forexpros – The U.S. dollar slid lower against its Canadian counterpart on Monday, as market sentiment was supported by strong Chinese manufacturing data but ongoing concerns over the global economic outlook kept risk appetite in check.
USD/CAD hit 0.9952 during early U.S. trade, the session low; the pair subsequently consolidated at 0.9974, slipping 0.08%.
The pair was likely to find support at 0.9945, the low of March 28 and resistance at 1.0018, the high of March 29.
Market sentiment found support after official data on Sunday showed that manufacturing activity in China jumped to an 11-month high in March, easing concerns over a slowdown in the world’s second largest economy.
Another report earlier Monday showed that U.K. manufacturing activity expanded at the fastest rate in 10 months in March.
However, fears that the euro zone is slipping into a recession were underlined after official data showed that the unemployment rate in the region ticked up to a record high of 10.8% in February from 10.7% the previous month, broadly in line with expectations.
The Canadian dollar also came under pressure from weaker lower oil prices, as crude oil contracts for delivery in May fell 0.58% on the New York Mercantile Exchange to trade at USD102.50 a barrel.
Raw materials, including oil account for about half of Canada’s export revenue.
The loonie, as the Canadian dollar is also known, was higher against the euro, with EUR/CAD shedding 0.44% to hit 1.3257.
Later Monday, the Institute of Supply Management was to release a closely watched report on U.S. manufacturing activity, while Bank of Canada Governor Mark Carney was to speak.
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