Forexpros – The U.S. dollar was holding steady against its Canadian counterpart on Wednesday, trading in a tight range as markets awaited news of a breakthrough on a debt restructuring deal for Greece.
USD/CAD hit 0.9936 during early U.S. trade, the pair’s lowest since Monday; the pair subsequently consolidated at 0.9942, dipping 0.03%.
The pair was likely to find short-term support at 0.9927, Monday’s low and a three-month low and resistance at 0.9994, Tuesday’s high.
Investors remained wary in the absence of any signs of a breakthrough in Greece but risk appetite remained supported by underlying expectations that a deal to pave the way for a default-saving bailout was getting closer.
Greek Prime Minister Lucas Papademos was to hold talks with the leaders of Greece’s three political parties later in the day, to discuss the conditions being demanded by the country’s international creditors in exchange for a second bailout, worth EUR130 billion.
Meanwhile, sentiment on the greenback was hit after Federal Reserve Chairman Ben Bernanke indicated that the central bank would keep borrowing costs close to zero for another two years, despite data last week showing the U.S. unemployment rate unexpectedly fell to a three-year low.
In testimony to the Senate Budget Committee in Washington, Bernanke said the decline in the jobless rate understated weakness in the labor market.
The Canadian dollar also found some support from higher oil prices, with crude oil for delivery in March jumping 1.48% to trade at USD99.86 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
The loonie, as the Canadian dollar is also known, was almost unchanged against the euro, with EUR/CAD dipping 0.03% to hit 1.3181.
Also Wednesday, official data showed that Canadian housing starts fell less-than-expected in January.
In a report, the Canada Mortgage and Housing Corporation said that the seasonally adjusted annual rate of housing starts fell to 198,000 units in January from an unrevised 200,000 units the previous month, beating expectations for a decline to 192,000 units.
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