Forexpros - The U.S. dollar remained lower against its Canadian counterpart on Tuesday, as hopes linked to Spain’s bailout supported market sentiment but investors remained cautious as developments in the euro zone remained in focus.
USD/CAD hit 1.2061 during early U.S. trade, the session low; the pair subsequently consolidated at 1.2075, shedding 0.40%.
The pair was likely to find support at 1.0020, Monday’s low and resistance at 1.0353, the high of June 8.
Demand for the safe haven greenback was hit amid hopes that Spain’s bank bailout would help stabilize markets, but Investors remained wary as questions remained over the source of the rescue funds and whether the bailout repayments would add to the country’s already high borrowing costs.
The yield on Spanish 10-year bonds climbed to 6.64% earlier, hovering close to the critical 7% threshold, which is seen as unsustainable in the long term.
Investors also remained jittery ahead of Sunday’s general election in Greece, which could decide the course of the country’s future in the euro zone.
The pair was little changed after official data showed that U.S. import prices fell broadly in line with market expectations in May, while the previous month’s figure was revised to a flat reading.
The U.S. Bureau of Labor Statistics said import prices fell by a seasonally adjusted 1.0% in May, in line with expectations.
Import prices for April were revised to a flat reading from a previously reported decline of 0.5%.
Year-over-year, U.S. import prices fell at an annualized rate of 0.3% in May, after rising at rate of 0.5% in April.
The loonie, as the Canadian dollar is also known, was higher against the euro, with EUR/CAD shedding 0.34% to hit 1.2834.
Later in the day, the U.S. was to publish a government report on the federal budget balance.
