Investing.com - The U.S. dollar edged higher against the Canadian dollar on Tuesday, but gains were limited as concerns over the U.S. fiscal cliff eased, weighing on demand for the greenback.
USD/CAD hit 0.9852 during early U.S. trade, the session high; the pair subsequently consolidated at 0.9849, rising 0.15%.
The pair was likely to find support at 0.9824, the low of December 13 and a two-month low and resistance at 0.9880, Monday's high and a one-week high.
Negotiations aimed at avoiding the automatic tax hikes and spending cuts, which investors fear could derail the U.S. recovery, have intensified in recent days, raising hopes that lawmakers will reach an agreement ahead of the January 1 deadline.
In the U.S., official data showed that the current account deficit narrowed to USD107.53 billion in the third quarter, from USD118.1 billion in the previous quarter, the lowest level since 2010.
The loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD rising 0.27% to 1.2981.
Trade was expected to remain quiet on Tuesday, with neither the U.S. nor Canada scheduled to release more economic data.
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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.
