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Forex - USD/CAD eases off 7-week low in thin holiday trade

Published 07/04/2011, 09:33 AM
Updated 07/04/2011, 09:33 AM

Investing.com – The U.S. dollar eased off a seven-week low against its Canadian counterpart in holiday-thinned trade on Monday, as risk appetite waned after ratings agency Standard & Poor’s warned that a plan to rollover Greek debt could  amount to a default.

USD/CAD pulled back from 0.9578, the pair’s lowest since May 11 to hit 0.9601 during European late afternoon trade, edging 0.17% higher.

The pair was likely to find support at 0.9512, the low of May 11 and resistance at 0.9650, Friday’s high.

Standard & Poor’s said earlier Monday that a proposed debt rollover plan for Greece may place the country in “selective default” under the ratings firm's criteria.

French lenders had recently proposed a plan to reinvest half of the proceeds from maturing Greek government bonds into new 30-year Greek bonds. The European Central Plan said that it supported the plan, as long as it was voluntary.

Over the weekend, euro zone finance ministers authorized a EUR12 billion tranche of bailout funds for Greece and said details of a second aid package for Athens would be finalized by mid-September.

In Canada, data released earlier showed that the Canadian raw materials price index fell significantly more-than-expected in May, as oil and metal prices eased.

The RMPI declined by a seasonally adjusted 5.2% in May, after increasing by a revised 6.9% in April. Analysts had expected the raw materials purchase price index to fall by 3.0%.

Raw materials, including oil account for about half of Canada’s export revenue.

The Canadian dollar was also lower against the euro, with EUR/CAD gaining 0.13% to hit 1.3941.

Meanwhile, markets in the U.S. were to remain closed for Independence Day.

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