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Forex - USD/CAD hits daily low as Mideast tensions fuel oil rally

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Forex Pros - The U.S. dollar fell to a daily low against its Canadian counterpart on Wednesday, as crude oil, Canada's largest export, climbed above USD100 a barrel amid fears over growing signs of unrest in Saudi Arabia.

USD/CAD hit 0.9714 during European late afternoon trade, the daily low; the pair subsequently consolidated at 0.9728, shedding 0.16%.

The pair was likely to find support at 0.9681, Tuesday's low and a 39-month low and resistance at 0.9788, Monday's high.

Crude futures for delivery in April were trading at USD100.56 a barrel on the New York Mercantile Exchange, after peaking at USD101.27 earlier in the day.

In testimony before the Senate Banking Committee on Tuesday, U.S. Federal Reserve Chairman Ben Bernanke warned that a sustained rise in oil prices could spark a broader rise in inflation.

''Sustained rises in the prices of oil and other commodities would represent a threat both to economic growth and to overall price stability,'' he said.

Earlier Wednesday, a report by payroll processing firm ADP said U.S. private sector employment rose by 217,000 in February, better than the expected 170,000.

The Canadian dollar shrugged off a report by Statistics Canada showing that the raw material price index rose by 0.3% in January from December, much slower than the 3.0% expected gain. The industrial price product index was up 0.2%, less than the expected 0.6% increase.

Meanwhile, the loonie was down against the euro, with EUR/CAD rising 0.28% to hit 1.3464.

Later in the day, Ben Bernanke was to testify for a second day before the Senate Banking Committee in Washington, while the Fed was to publish its Beige Book.

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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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