Forex - USD/CAD close to multi-year low as risk appetite sharpens

Forex Pros – The U.S. dollar was trading close to multi-year lows against its Canadian counterpart on Wednesday, as optimism over the global economic recovery boosted commodity linked currencies.

USD/CAD hit 0.9688 during European afternoon trade, the pair’s lowest since March 10; the pair subsequently consolidated at 0.9706, shedding 0.36%.

The pair was likely to find support at 0.9667, the low of March 9 and a 40-month low and resistance at 0.9783, Tuesday’s high.

Earlier in the day, official data showed that Canadian producer prices and raw material prices rose in February.

Statistics Canada said the industrial product price index rose in line with expectations, climbing by 0.7% after rising by 0.2% in January.

Meanwhile, the raw materials purchase price index rose by 1.8% in February, after increasing by 0.3% the previous month. Analysts had expected the raw materials purchase price index to rise by 0.8%.

The February rise was led by a 3.0% jump in oil and coal products, and primary metal products. Both indexes have been on an upward trend since mid-2010.

The loonie was also higher against the euro, with EUR/CAD shedding 0.58% to hit 1.3670.

Also Wednesday, payroll processor ADP said U.S. private employers added 201,000 jobs in March, while February's figure was revised down slightly.