Forex - USD/CAD trims gains in early trade

A A A - The U.S. dollar trimmed gains against the Canadian dollar in early trade on Tuesday as jitters over whether the Federal Reserve will begin to scale back its asset purchase program continued to dominate sentiment.

USD/CAD pulled back from 1.0250, the pair's highest since Friday, to trade at 1.0210 during early U.S. trade, up 0.17% for the day.

The pair was likely to find support at 1.0166, Monday's low and resistance at 1.0287, Monday's high.

Investors continued to focus on whether the Federal Reserve will begin to unwind its USD85 billion-a-month asset purchase program later this year.

Speculation that the U.S. central bank will begin to taper its bond buying program continued following Friday's upbeat jobs data and after ratings agency Standard & Poor's revised its long-term outlook on the U.S. credit rating to stable from negative on Monday, citing an improving economic outlook.

Elsewhere, the Canadian dollar dropped more than 2% against the yen on Tuesday, with CAD/JPY falling 2.2% to 94.72.

The yen strengthened against the other major currencies following sharp falls in Japanese equities overnight after the Bank of Japan refrained from implementing measures to ease volatility in the government bond market following its latest policy meeting.

The BoJ left monetary policy unchanged and said the economy was picking up, one day after official data showed that Japan's economy expanded by an annualized 4.1% in the first quarter, up from a preliminary reading of 3.5%. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.
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This article appears in: Investing , Forex and Currencies

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