Forexpros – The U.S. dollar advanced to a session high against the Canadian dollar on Tuesday, after Canadian gross domestic product numbers for May came in just short of market expectations.
USD/CAD hit 1.0043 during early U.S. trade, the session high; the pair subsequently consolidated at 1.0034, gaining 0.21%.
The pair was likely to find support at 1.0001, the session low and a two-month low and resistance at 1.0072, the high of May 15.
Statistics Canada said Canadian GDP expended by 0.1% in May, just below expectations for growth of 0.2%, following an unrevised 0.3% gain in April.
The report said reduced output in the manufacturing, mining and gas sectors contributed to the weaker reading, while retail trade rebounded in May.
In the U.S., official data showed that the personal consumption expenditures price index was flat in June, while personal income rose 0.5%, slightly better than expectations for a 0.4% increase.
Overall market sentiment remained subdued amid expectations for Federal Reserve and the European Central Bank to ease monetary policy this week, in an attempt to spur economic growth in the U.S. and stem the long running debt crisis in the euro zone.
Expectations that the ECB is set to announce bold measures to tackle the debt crisis have been mounting after the bank’s head Mario Draghi pledged last week to do whatever is necessary to preserve the euro.
But investors remained wary amid concerns that an inadequate policy response by the ECB could send markets lower.
Market participants were also eyeing the outcome of the Federal Reserve’s policy setting meeting on Wednesday, amid speculation over whether the U.S. central bank will indicate if further quantitative easing measures are imminent.
The loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD rising 0.39% to 1.2328.
Later Tuesday, the U.S. was to release a report on consumer confidence, as well as data on manufacturing activity in the Chicago area.
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