Forexpros – The U.S. dollar pared losses against its Canadian counterpart on Tuesday, but market sentiment remained on the back foot amid concerns over the ongoing debt crisis in the euro zone.
USD/CAD pulled back from 1.0258, the pair’s lowest since November 18, to hit 1.0300 during early U.S. trade, still down 0.38% on the day.
The pair was likely to find support at 1.0198, the low of November 18 and resistance at 1.0362, the days high.
Risk appetite remained supported after Italy auctioned the maximum targeted amount of EUR7.5 billion of debt earlier in the day, but the country’s borrowing costs surged to euro-era highs.
The yield on the three-year bond was a record 7.89% and 10-year yields climbed to 7.56% from 6.06% at a similar auction last month.
Meanwhile, euro zone finance ministers were meeting in Brussels. The ministers were expected to approve plans to enlarge the scope of the region’s bailout fund and to sign off on Greece’s next tranche of financial aid.
In the U.S., data from Standard & Poor with Case-Shiller showed that house prices fell for the 15th consecutive month in September, falling at an annualized rate of 3.6%, outstripping expectations for a 3% decline.
The Canadian dollar was also higher against the euro, with EUR/CAD shedding 0.27% to hit 1.3735.
Later in the day, the U.S. was to release a report on consumer confidence.
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