Forex - USD/CAD dips as market preps for possible Fed stimulus
_news_article_title_published Sep 10, 2012 09:10PM ET
Investing.com - The Canadian dollar rose against its U.S. counterpart on Tuesday, briefly hitting a year-high in earlier sessions, as investors sold the greenback ahead of the Federal Reserve's two-day monetary policy meeting Wednesday.
Weak jobs numbers released in the U.S. last week are fueling talk the Fed will unveil stimulus measures this week.
In Asian trading on Tuesday, USD/CAD hit 0.9769, down 0.08%, up from a low of 0.9766 and off a high of 0.9774.
The pair sought to test support at 0.9755, Monday's low, and resistance at 0.9789, Monday's high.
The U.S. Bureau of Labor Statistics reported Friday that the U.S. economy created a net 96,000 nonfarm payroll jobs in August, well below market calls for 125,000 jobs.
The numbers continued to bolster already growing sentiment that the Federal Reserve will announce plans to roll out a third round of quantitative easing at its two-day monetary policy meeting that begins Wednesday.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities held by banks, pumping the economy full of fresh liquidity in a way that pushes down interest rates to encourage investing and hiring.
Such accommodative policies tend to weaken the dollar by design.
Meanwhile, the Bank of Canada has held monetary policy steady, keeping benchmark interest rates unchanged at 1.00% and has not hinted at any need to loosen policy, which bolstered the Canadian currency.
Last week in Canada, joblessness data came in solid, with the economy adding 34,000 jobs in August, which kept the unemployment rate unchanged at 7.3%, largely in line with expectations.
The Canadian dollar, meanwhile, was up against the euro and down against the yen, with EUR/CAD down 0.03% and trading at 1.2472 and CAD/JPY down 0.01% at 80.05.
Later Tuesday, both Canada and the U.S. will release trade balance data.
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Weak jobs numbers released in the U.S. last week are fueling talk the Fed will unveil stimulus measures this week.
In Asian trading on Tuesday, USD/CAD hit 0.9769, down 0.08%, up from a low of 0.9766 and off a high of 0.9774.
The pair sought to test support at 0.9755, Monday's low, and resistance at 0.9789, Monday's high.
The U.S. Bureau of Labor Statistics reported Friday that the U.S. economy created a net 96,000 nonfarm payroll jobs in August, well below market calls for 125,000 jobs.
The numbers continued to bolster already growing sentiment that the Federal Reserve will announce plans to roll out a third round of quantitative easing at its two-day monetary policy meeting that begins Wednesday.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities held by banks, pumping the economy full of fresh liquidity in a way that pushes down interest rates to encourage investing and hiring.
Such accommodative policies tend to weaken the dollar by design.
Meanwhile, the Bank of Canada has held monetary policy steady, keeping benchmark interest rates unchanged at 1.00% and has not hinted at any need to loosen policy, which bolstered the Canadian currency.
Last week in Canada, joblessness data came in solid, with the economy adding 34,000 jobs in August, which kept the unemployment rate unchanged at 7.3%, largely in line with expectations.
The Canadian dollar, meanwhile, was up against the euro and down against the yen, with EUR/CAD down 0.03% and trading at 1.2472 and CAD/JPY down 0.01% at 80.05.
Later Tuesday, both Canada and the U.S. will release trade balance data.
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_newTouch_News_Source: Investing.com
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