Forexpros – The U.S. dollar rose to a six-week high against its Canadian counterpart on Monday, as demand for higher yielding assets was hit by growing concerns over sovereign debt loads in the euro zone and the U.S.
USD/CAD hit 1.0369 during early U.S. trade, the pair’s highest since October 10; the pair subsequently consolidated at 1.0344, gaining 0.67%.
The pair was likely to find support at 1.0207, the low of November 17 and resistance at 1.0418, the high of October 10.
Risk appetite was hit as the spread between 10-year Spanish bond yields and their German counterparts widened as investors remained jittery amid uncertainty over the newly elected government’s ability to deal with its economic problems.
Meanwhile, rating’s agency Moody’s said a rise in French government debt yields and weaker growth prospects could be negative for the outlook on the country’s credit rating.
In the U.S., a formal announcement on the failure of a U.S. congressional “super committee” to agree on a package of measures to slash USD1.2 trillion off the U.S. deficit over the next 10 years was expected later in the day.
The broadly stronger U.S. dollar also weighed on crude oil prices, with the January crude contract on the New York Mercantile Exchange tumbling 0.81% to trade at USD96.83 a barrel.
Raw materials, including oil account for about half of Canada’s export revenue.
The Canadian dollar was also lower against the euro, with EUR/CAD rising 0.25% to hit 1.3935.
Also Monday, official data showed that Canadian wholesale sales rose less-than-expected in September, climbing 0.3%, missing expectations for a 0.6% increase.
Forexpros
