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Forex - Broadly stronger greenback edges higher against loonie

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Investing.com -

Investing.com - The U.S. dollar edged higher against its Canadian counterpart in subdued trade on Tuesday, as market sentiment weakened amid renewed concerns over geopolitical tensions in Ukraine and Iraq.

USD/CAD hit 1.0953 during early U.S. trade, the session high; the pair subsequently consolidated at 1.0936 adding 0.16%.

The pair was likely to find support at 1.0885, the low of August 1 and resistance at 1.0984, the high of August 8.

Markets were jittery as concerns over an escalation of hostilities between Russia and Ukraine mounted amid warnings that Russia was using a humanitarian aid convoy as a pretext for invading eastern Ukraine.

Meanwhile, Iraq on Monday named Haidar al-Abadi as the new prime minister to end the eight-year rule of Nuri al-Maliki, but Maliki has refused to go and deployed special forces in Baghdad.

The loonie was steady against the euro, with EUR/CAD inching down 0.07% to 1.4609.

The euro weakened broadly after a report earlier showed that investor confidence in Germany, the euro zone's largest economy slumped to the lowest level since December 2012 this month.

The ZEW Centre for Economic Research reported that its index of German economic sentiment dropped to 8.6 this month, down from 27.1 in July. It was the weakest reading in 20 months and was well below economists' forecasts of 18.2.

The report said the decline in economic sentiment was likely connected to the impact of ongoing geopolitical tensions on the German economy. The ZEW also said the report indicated that economic growth in Germany will be weaker than expected in 2014.

The euro zone was to publish an inflation report as well as preliminary data on second quarter growth in the euro zone, Germany and France on Thursday, amid expectations for weak readings.

Weak data on growth and inflation would add to pressure on the European Central Bank to implement fresh measures to shore up the recovery after it cut rates to record lows in June.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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