USD/CAD hit 1.0294 during early US morning trade, the session low; the pair subsequently consolidated at 1.0316, edging up 0.09%. The pair was likely to find support at 1.2041, the low of February 26 and resistance at 1.0342, the session high and an eight-month high. In a report, Statistics Canada said that Canada’s gross domestic product contracted by 0.2% in December, in line with expectations, following a 0.3% expansion the previous month. In the US, official data showed that personal spending rose 0.2% in January, in line with expectations, after a 0.1% rise the previous month. Meanwhile, investors remained cautious as the “sequester” of USD85 billion of automatic spending cuts was set to hit at midnight on Friday. US President Barack Obama was to meet with Congressional leaders at the White House during the day to discuss ways to avoid sequestration striking, but hopes were low for a deal as Democrats and Republicans have so far failed to reach a compromise. The loonie was higher against the euro with EUR/CAD shedding 0.38%, to hit 1.3407. The euro came under broad selling pressure after preliminary data showed that consumer price inflation in the euro zone ticked down to an annualized rate of 1.8% in February, from a rate of 2.0% the previous month. A separate report showed that the unemployment rate in the euro zone rose to a new record high of 11.9% in January from 11.8% the previous month. Analysts had expected the rate to remain unchanged at 11.8% in January. Later in the day, the US was to release a report from the Institute of Supply Management on manufacturing activity and revised data on consumer sentiment from the University of Michigan.
EasyForexNews Research Team