Investing.com - The U.S. dollar climbed against its Canadian counterpart on Tuesday, as sustained fears over the effects of the Brexit vote on global economic growth supported demand for the safe-haven greenback.
USD/CAD hit 1.2941 during early U.S. trade, the pair’s highest since Friday; the pair subsequently consolidated at 1.2948, advancing 0.80%.
The pair was likely to find support at 1.2714, the high of June 24 and resistance at 1.3108, the high of June 28.
Investors were still cautious as Britain’s shock decision to leave the European Union sparked uncertainty over the consequences of the U.K. vote on the country’s economy and the global economy as a whole.
The Bank of England warned on Tuesday of “challenging” risks to financial stability following the Brexit vote and eased regulatory requirements on the banking sector.
BoE Governor Mark Carney said the move represented a "major change" that would help the economy to cope with the Brexit consequences.
In its bi-annual financial stability report, the BoE said the risks it had feared ahead of the Brexit poll had started to materialise, as sterling plunged to 31-year lows and as financial stocks tumbled 20%.
Demand for the commodity-heavy Canadian dollar also weakened as oil prices moved sharply lower on Tuesday due to global growth concerns.
The loonie was lower against the euro, with EUR/CAD climbing 0.77% to 1.4438.
Earlier Tuesday, Markit said its German services PMI rose to 53.7 in June from 53.2 in May, compared to expectations for an unchanged reading.
For the entire euro zone, the Markit services PMI rose to 52.8 last month from 52.4 in May, also condounding expectations for an unchanged reading.