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Forex - USD/CAD close to 8-month highs after BoC

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Investing.com - The U.S. dollar extended gains to trade at almost eight-month highs against the Canadian dollar on Wednesday after the Bank of Canada left interest rate unchanged and said current monetary policy is appropriate.

USD/CAD hit 1.0337 during U.S. morning trade, the pair's highest since March 1; the pair subsequently consolidated at 1.0325, gaining 0.53%.

The pair was likely to find support at 1.0254, the session low and near-term resistance at 1.0342, the high of March 1 and an eight-month peak.

The BoC left rates on hold at 1.00% in a widely expected decision and said existing monetary policy is likely to remain appropriate for "a period of time" after which some withdrawal of monetary stimulus will be required.

The bank said it expects growth in Canada to pick up through 2013, supported by modest growth in household spending combined with a recovery in exports and solid business investment.

Meanwhile, data showed that Canada's Ivey purchasing managers' index fell to 51.1 last month from 58.9 in January. Analysts had expected the index to tick down to 58.0.

Earlier Wednesday, data showed that the U.S. private sector added more jobs than expected last month, with ADP non-farm payrolls climbing 198,000, above expectations for an increase of 170,000.

The previous month's figure was revised up to a gain of 215,000 from a previously reported increase of 192,000.

A separate report showed that U.S. factory orders dropped 2% in January, slightly below expectations for a 2.2% decline.

The loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD rising 0.18% to 1.3426.

Sentiment on the single currency remained fragile ahead of the European Central Bank's policy meeting on Thursday amid concerns that President Mario Draghi may flag possible rate cuts in the future.

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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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