Forexpros - The U.S. dollar fell to a six-week low against its Canadian counterpart on Tuesday, as strong gains in crude oil prices boosted the Canadian currency, but investors remained cautious ahead of events to come later in the week.
USD/CAD hit 1.0140 during early U.S. trade, the pair’s lowest since May 18; the pair subsequently consolidated at 1.0145, shedding 0.25%.
The pair was likely to find support at 1.0103, the low of May 17 and resistance at 1.0200, Monday’s high.
Crude oil prices rallied in early U.S. trade, with crude futures for delivery in August jumping 3.3% on the New York Mercantile Exchange to trade at USD86.51 a barrel.
Raw materials, including oil account for about half of Canada’s export revenue.
Crude’s gains came amid escalating tensions between Iran and the West, while hopes for further easing measures by world central banks also boosted demand for riskier assets.
The greenback remained under pressure after data on Monday showed that the U.S. manufacturing sector had contracted for the first time since July 2009 in June.
The weak data fuelled speculation that the Federal Reserve may implement a third round of quantitative easing to support economic growth, which has been hit by the ongoing debt crisis in the euro zone.
Meanwhile, investors were looking ahead to the outcome of Bank of England and European Central Bank monetary policy meetings later in the week, as well as U.S. data on nonfarm payrolls on Friday.
The loonie, as the Canadian dollar is also known, was higher against the euro, with EUR/CAD shedding 0.30% to hit 1.2751.
Later in the day, the U.S. was to release official data on factory orders.
