Forex - USD/CAD rises off 3-month trough in early trade

Published 2016-03-07, 09:28 a/m
Greenback edges higher vs. loonie but gains capped
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Investing.com - The U.S. dollar rose against its Canadian counterpart on Monday, easing off a three-month trough as Friday’s U.S. jobs report lent support to the greenback, although rising oil prices continued to boost the Canadian currency.

USD/CAD hit 1.3370 during early U.S. trade, the session high; the pair subsequently consolidated at 1.3363, gaining 0.35%.

The pair was likely to find support at 1.3288, the low of December 3 and resistance at 1.3472, Friday’s high.

The U.S. economy added 242,000 new jobs last month and the unemployment rate held steady at an eight-year low of 4.9%.

But average hourly earnings fell by 0.1% during February, reversing the 0.5% rise seen in January.

The weak wage numbers indicated that consumer inflation is likely to remain muted. Federal Reserve policymakers are watching inflation closely as they try to determine when to raise rates again.

Meanwhile, the commodity-related Canadian dollar remained supported as oil prices rose above $36 a barrel for the first time since January 6.

The loonie was higher against the euro, with EUR/CAD down 0.11% at 1.4637.

The euro came under pressure after data earlier showed that German factory orders fell 0.1% in January, adding to a 0.2% drop in December.

Domestic orders fell by 1.6% during the month, pointing to weakening demand within the euro zone’s largest economy.

Investors were looking ahead to Thursday’s European Central Bank meeting after the bank disappointed expectations with a smaller-than-expected stimulus move at its December meeting.

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