Investing.com - The Canadian dollar rose against its U.S. counterpart on Tuesday as investors worldwide sold dollar positions on news retail sales contracted in June, fueling talk the Federal Reserve will take steps to weaken the greenback to spur recovery.
In Asian trading on Tuesday, USD/CAD hit 1.0134, down 0.16%, up from a low of 1.0130 and off a high of 1.0151.
The pair sought to test support at 1.0130, the low of July 13, and resistance at 1.0157, the high of July 5.
Weak retail sales sent the dollar falling against most major currencies on Tuesday.
The Commerce Department reported U.S. retail sales dropped by a seasonally adjusted 0.5% in June, far worse than market calls for a 0.2% gain.
The softer-than-expected numbers came in wake of a 0.2% decline in May and marked the first time retail sales had dropped for three consecutive months since 2008.
Core retail sales, which are stripped of automobile sales, contracted for a second consecutive month, dropping 0.4%, defying market expectations for a gain of 0.1%, after falling by 0.4% in May.
Consumer spending accounts for about 70 percent of total U.S. economic output, and poor retail sales convinced more and more market watchers the Federal Reserve will intervene in the economy to pick up the pace of recovery.
Easing measures, especially bond buybacks from banks that pump the economy full of liquidity, weaken the dollar.
The Canadian dollar, meanwhile, was down against the euro and up against the yen, with EUR/CAD up 0.08% and trading at 1.2466 and CAD/JPY up 0.19% at 77.85.
Later Tuesday, the U.S. will publish its latest consumer price index as well as reports on the country's capacity utilization rate and industrial production.
Federal Reserve Chairman Ben Bernanke will testify on the U.S. central bank’s monetary policy decisions before Congress.
In Asian trading on Tuesday, USD/CAD hit 1.0134, down 0.16%, up from a low of 1.0130 and off a high of 1.0151.
The pair sought to test support at 1.0130, the low of July 13, and resistance at 1.0157, the high of July 5.
Weak retail sales sent the dollar falling against most major currencies on Tuesday.
The Commerce Department reported U.S. retail sales dropped by a seasonally adjusted 0.5% in June, far worse than market calls for a 0.2% gain.
The softer-than-expected numbers came in wake of a 0.2% decline in May and marked the first time retail sales had dropped for three consecutive months since 2008.
Core retail sales, which are stripped of automobile sales, contracted for a second consecutive month, dropping 0.4%, defying market expectations for a gain of 0.1%, after falling by 0.4% in May.
Consumer spending accounts for about 70 percent of total U.S. economic output, and poor retail sales convinced more and more market watchers the Federal Reserve will intervene in the economy to pick up the pace of recovery.
Easing measures, especially bond buybacks from banks that pump the economy full of liquidity, weaken the dollar.
The Canadian dollar, meanwhile, was down against the euro and up against the yen, with EUR/CAD up 0.08% and trading at 1.2466 and CAD/JPY up 0.19% at 77.85.
Later Tuesday, the U.S. will publish its latest consumer price index as well as reports on the country's capacity utilization rate and industrial production.
Federal Reserve Chairman Ben Bernanke will testify on the U.S. central bank’s monetary policy decisions before Congress.