Forexpros – The U.S. dollar advanced against its Canadian counterpart on Tuesday, as ongoing concerns over the outcome of a key budget vote in Italy weighed on demand for riskier assets.
USD/CAD hit 1.0182 during European afternoon trade, the daily high; the pair subsequently consolidated at 1.0145, rising 0.19%.
The pair was likely to find support at 1.0052, the low of November 3 and resistance at 1.0245, the high of October 20.
Investors remained cautious as Italian Prime Minister Silvio Berlusconi’s government was to face a key vote on fiscal reforms, in what was being seen as a test of the prime minister’s majority in parliament and which would determine if he has enough support to stay in power.
Meanwhile, Greek leaders struggled to agree on the new head of an interim government as they faced growing pressure to strike a deal on a unity coalition as soon as possible with hopes of saving the country’s finances.
But the loonie’s losses were limited after industry data showed that Canada housing starts fell less-than-expected in October.
In a report, the Canada Mortgage and Housing Corporation said that the annual rate of housing starts fell to 208,000 units in October, beating expectations for a decline to 200,000 units.
The loonie was also supported as crude oil for delivery in December climbed 0.85% to trade at USD96.34 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
The Canadian dollar was down against the euro with EUR/CAD advancing 0.45%, to trade at 1.4011.
Also Tuesday, finance ministers from the European Union member states were to meet in Brussels to discuss the region’s ongoing financial crisis.
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