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Forex - USD/CAD falls on Fed uncertainty, strong Canada retail sales
ForexJul 23, 2013 03:11PM ET
Forexpros - The U.S. dollar weakened against its Canadian counterpart on Tuesday after retail sales came in stronger than expected in Canada, while soft housing data in the U.S. frayed nerves that the Federal Reserve will keep monetary stimulus programs in place for longer than once thought.
In U.S. trading on Monday, hit 1.0283, down 0.48%, up from a low of 1.0280 and off a high of 1.0350.
The pair sought to test support at 1.0174, the low from June 19, and resistance at 1.0350, the earlier high.
The U.S. National Association of Realtors reported on Monday that existing home sales fell 1.2% to 5.08 million units in June, missing market calls for sales to rise 0.6% to 5.25 million units in June.
Sales for May were revised down to 5.14 million from a previously reported 5.18 million.
The report added sales were up 15.2% from June of last year, while average house prices jumped 13.5% on a year-over-year basis.
While the numbers indicated that recovery continues in the housing sector, markets concluded the figures were soft enough to sway monetary authorities to keep stimulus programs in place for now, sentiments that carried over into a quiet session on Tuesday.
Stimulus programs such as the Fed's monthly USD85 billion in asset purchases, among others, tend to keep the dollar weaker to spur recovery by pushing borrowing costs lower across the broader economy.
Meanwhile, Statistics Canada said earlier Tuesday that June retail sales jumped 1.9% from a month earlier in May, well above expectations for a 0.4% gain, while core retail sales rose 1.2%, compared to expectations for a 0.1% increase, which sent the loonie firming against the greenback.
The Canadian dollar, meanwhile, was up against the euro and up against the yen, with down 0.18% and trading at 1.3603 and up 0.26% at 96.69.
On Wednesday, the U.S. is to release official data on new home sales, a leading indicator of economic health.
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