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Forex - USD/CAD climbs after U.S., Canadian data

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Investing.com -

Investing.com - The U.S. dollar climbed against its Canadian counterpart on Tuesday, after mixed economic reports from the U.S., as downbeat Canadian housing starts data weighed on the local currency.

USD/CAD hit 1.3102 during early U.S. trade, the session high; the pair subsequently consolidated at 1.3095, advancing 0.73%.

The pair was likely to find support at 1.2989, Monday's low and resistance at 1.3181, Monday's high.

The U.S. Bureau of Labor Statistics reported on Tuesday that unit labor costs increased by0.5% in the three months to June, above forecasts for a gain of 0.1% and following rise of 2.3% in the first quarter.

The report also said that nonfarm business sector labor productivity increased by 1.3% in the second quarter, missing expectations for a gain of 1.6%. The previous quarter's figure was revised to a drop of 1.1% from a previously reported fall of 3.1%.

The dollar has strengthened earlier in the day, after China devalued the yuan in an attempt to help exporters after a recent spate of disappointing economic data.

The central bank described it as a "one-off depreciation" of nearly 2%, based on a new way of managing the exchange rate that better reflected market forces.

In Canada, data showed that housing starts rose by 193,000 last month, below expectations for an increase of 195,000. Housing starts rose by 202,300 in June, whose figure was downwardly revised from a previously estimated 202,800 gain.

The commodity-linked Canadian dollar also continued to suffer from the continuing drop in oil prices . Crude oil futures for September delivery were down 3.34% at $43.45 as U.S. trading opened.

The loonie was sharply lower against the euro, with EUR/CAD rallying 1.09% to 1.4489.

The single currency found support after a Greek official said early Tuesday that his government had completed talks with creditors over a deal setting out the terms of a third bailout, with some details remaining.

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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.

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