Investing.com - 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%.
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