Investing.com - The U.S. dollar pared losses against its Canadian counterpart on Tuesday, but sentiment on the greenback remained vulnerable ahead of Friday’s speech by Federal Reserve Chair Janet Yellen.
USD/CAD pulled away from 1.2885, the session low, to hit 1.2910 during early U.S. trade, still down 0.29%.
The pair was likely to find support at 1.2826, the low of August 17 and resistance at 1.2997, the high of August 12.
Market participants are hoping Ms. Yellen will give further indications on the timing of future rate hikes this Friday.
The dollar moved broadly higher after San Francisco Federal Reserve President John Williams late last week signaled support for a September rate increase.
The comments came after New York and Atlanta Fed presidents William Dudley and Dennis Lockhart both said a September rate hike may be on the table.
Meanwhile, the Canadian dollar’s gains were expected to remain limited as oil prices were lower on Tuesday, amid fears the upcoming meeting among major oil producers may not yield any action to reduce the global supply glut.
The loonie was higher against the euro, with EUR/CAD shedding 0.22% to 1.4623.
Earlier Tuesday, research group Markit reported that Germany’s manufacturing purchasing managers’ index slipped to a two-month low of 53.6 in August from 53.8 the previous month, confounding expectations for a slip to 53.5.
Germany’s services PMI fell to a 15-month low of 53.3 this month from 54.4 in July, compared to expectations for an unchanged reading.
Markit also said that the French manufacturing PMI ticked down to 48.5 in August from 48.6 last month, compared to expectations for a rise to 48.8.
The French services PMI rose to 52.0 this month from 50.5 in July, beating expectations for an unchanged reading.
For the entire euro zone, the composite PMI, which measures the combined output of both the manufacturing and service sectors ticked up to 53.3 in August from 53.2 in July, compared to expectations for a slip to 53.1.